China: Xiangyu Establishes JV with State Owned Enterprise

Xiangyu Dredging Holdings Limited, the largest privately owned dredging company in China in terms of dredging volume in 2010, announced to have reached legally binding framework agreement with Zhuzhou Cyclic Economy Investment and Development Co., Ltd. at Hunan Province in China.

In accordance to the agreement, Xiangyu Dredging and Zhuzhou Investment have agreed to take steps to incorporate a new enterprise. Under the agreement, by following the plan, the New JV will take part in environmental management and construction of infrastructure in the Qingshui Lake area (“Qingshui Lake Projects”). These projects are quintessential to the environmental management program of the Zhuzhou Qingshuitang Cyclic Economy Industrial Zone at Hunan Province. These projects are expected to last for about five years. The total project value of the Qingshui Lake Projects is expected to reach approximately RMB2 billion.

The initial registered capital of New JV is RMB50 million. The Company and Zhuzhou Investment will initially inject RMB40 million and RMB10 million (which represents 80% and 20% respectively of the initial registered share capital of New JV.

Zhuzhou Investment Zhuzhou Investment is a state-owned enterprise established by the Committee of Zhuzhou Qingshuitang Cyclic Economy Industrial Zone. It is the financing and investment platform of the local government of the Zhuzhou Qingshuitang Cyclic Economy Industrial Zone, which is responsible for, among other matters, the environmental management, building of infrastructure in the Qingshui Lake area, Hunan Province, the PRC.

[mappress]

Press Release, October 23, 2012