Link: https://links.sgx.com/1.0.0/corporate-announcements/20X0BJTWKZB03QKY/b6f2fb217bca25505d05d02b508af8e67bce38667ddebdc397505b7366ecf632

Summary:

• Leader Environmental, via wholly owned unit United Greentech (Guangzhou), is setting up a new joint venture company with entrepreneur Yang Peng to provide EPC and O&M services for food waste and organic sludge treatment

• The JV will have initial paid-up capital of RMB10 million, with United Greentech holding 51% and Chengdu Zhanlan Future Environmental Protection (founded by Yang Peng) holding 49%

• The JV will acquire Chengdu Zhanlan’s proprietary sludge and food waste treatment technologies, related patents and existing waste treatment facilities (80 t/day sludge and 50 t/day wastewater-to-organic-carbon capacity), all injected as capital, capped at RMB10 million in value

• Leader will advance RMB5 million as initial consideration for its 51% stake, with no further start-up capital required from Leader under this agreement

• Yang Peng will lead and manage the JV and undertakes to achieve net profit after tax by FY2028; if profitability is not reached, Leader can demand full repayment of the RMB5 million and transfer its 51% stake back to him

• If the JV achieves NPAT in any of FY2026–FY2028, Leader will pay Yang Peng an “Adjusted Consideration” for each profitable year, calculated as 10 times that year’s NPAT multiplied by 17%, netted off against the initial RMB5 million

• Leader may settle the Adjusted Consideration in cash, new shares, or a mix of both, with any new shares priced at the 30-day VWAP in line with SGX listing rules

• The collaboration combines Leader’s continuous thermal hydrolysis drying technology with Yang Peng’s carbon source production, bio-iron flocculant and vacuum drying solutions to offer more comprehensive, cost-efficient waste and sludge treatment packages

• The initial investment will be funded from convertible bond proceeds and is not expected to have a material impact on earnings or NTA per share for FY2025, and no directors or substantial shareholders have interests beyond their shareholdings