Hong Kong-based Green Energy Group is acquiring a recycling facility in Bunde, Germany.
The €400,000 cash deal includes two parcels of land as well as all existing buildings and structures, but excludes machines, Green Energy said in a 23 May filing with the Hong Kong Stock Exchange, the same day it entered the purchase agreement. The parcels measure about 4,519 square metres and 3,602 square metres, respectively.
The purchasing party is EnviroAssets, an indirect wholly-owned subsidiary of Green Energy, while the seller is an individual named Stefan Kolthoff.
Green Energy said it intends to operate a plastic recycling business at the property, which it expects will “contribute positively to the future growth” and generate synergies with its existing operations.
The facility used to house Kolthoff and its plastic and rubber recycling business, but the company entered liquidation on 1 November 2014. In the same month, German authority the State Labour Inspectorate ordered Kolthoff to remove the scrap materials that had been allegedly unlawfully stored at the property, but the order was not complied with.
Since the clearance of the scrap materials is a pre-condition required by the local authorities before they would grant the necessary licence and permits for conducting recycling business on the property, Green Energy is paying HK$6.39m (€736,000) to have the scrap materials — about 2,000 metric tons of EPDM or waste rubber rolls and sheets — cleared by Upframe, a British Virgin Islands company wholly owned by Kolthoff.
Green Energy said the market value of the facility was evaluated at €1.38m as of 6 April. Since the total cost of the deal, including removal of waste materials stands at HK$9.89 million (€1.14m), the company considers the deal “commercially favourable.”
In 2015, the company also acquired a property in Sande, Germany, from Guzman Ventures for HK$8.5m (€979,000), with plans to expand its existing recycling operations there — adjacent to the newly-acquired property.
The company said the existing plastics sorting and recycling facilities in Europe — currently about 1,200 active sites — will not be able to have enough capacity to process the waste materials generated there. It quoted a study by consultancy Ecoprog that estimates up to 300 new plastics sorting plants will be commissioned in Europe by 2025.
In addition to recycling operations, Green Energy also conducts trading of bio-cleaning materials and waste construction materials.