Sinofert Holdings Limited (297) announced a connected transaction involving its indirect non-wholly owned subsidiary, Sinochem Fuling. The transaction stems from national requirements for the harmless treatment of phosphogypsum, mandating 100% treatment and at least 65% comprehensive utilization by 2026.

Sinochem Fuling entered into the General Contracting Agreement for Backfill Utilization with China Bluestar Lehigh Engineering Corporation (CBLE) and Zhejiang Tuohai Construction Co., Ltd. (Zhejiang Tuohai). The agreement covers design, procurement, and construction services, aiming to implement a harmless phosphogypsum backfill utilization project. The total consideration is RMB62,644,158.09, including a RMB2,000,000.00 design fee and RMB60,644,158.09 for construction and installation.

Under the agreement, the project’s total construction period is 240 calendar days. The payment schedule accounts for design milestones, procurement costs, and construction progress. The agreement stipulates that Sinochem Fuling will make payments contingent upon construction progress and acceptance checks, with final payments after completion acceptance and settlement review.

The transaction constitutes a connected transaction because Sinochem Holdings Corporation Ltd. is the ultimate controlling shareholder of Sinofert, indirectly holding approximately 52.65% of the company’s issued shares, and CBLE is an indirect subsidiary of Sinochem Holdings. The highest applicable percentage ratio exceeds 0.1% but remains below 5%, triggering the reporting and announcement requirements without necessitating independent shareholders’ approval.

Sinochem Fuling, 74.56% owned by Sinofert and 25.27% held by the Fuling District State-owned Assets Supervision and Administration Commission of Chongqing and its subsidiary, focuses on phosphate compound fertilizer production and sales. CBLE specializes in project management for engineering, design, and construction. Zhejiang Tuohai provides construction and engineering services and is owned by four individual shareholders unaffiliated with Sinofert.

According to the announcement, the directors of Sinofert consider the terms of the transaction fair and reasonable, with the project aiming to align with official policies and enhance land utilization while meeting phosphogypsum treatment goals.