WG ENV TECH (ASX: 01845) has announced that its indirect wholly-owned subsidiary, Dehui Environment, and Changzhou Rongzhixiang have entered into an agreement to terminate their joint venture.
The joint venture was originally established to combine the resources and expertise of both parties, with the goal of creating a complementary business to the group's existing operations. The plan involved leveraging the group's resource recovery technology, currently used in waste plastic recycling, alongside Changzhou Rongzhixiang's experience and specialized knowledge in environmental equipment manufacturing.
However, due to changes in the business environment and strategic considerations, the two parties mutually agreed on June 18, 2026, to voluntarily wind up the joint venture company's operations. The termination agreement formally ends the original joint venture contract and provides for the dissolution and deregistration of the joint venture entity.
Both parties have agreed to release each other from all contractual obligations and any other existing or potential legal claims or liabilities arising from the joint venture agreement or its termination. They have also confirmed that no breaches of the original contract occurred during its term, and neither party bears any liability for its termination.
The dissolution and deregistration process is subject to approval from the relevant Chinese government authorities and is expected to be completed within the third quarter of 2026.
It is noted that neither party had made any capital contributions or injected other assets into the joint venture company, which had not commenced operations since its incorporation. Consequently, the group will not record any cash inflow or outflow from the dissolution.
The board of directors believes that terminating the joint venture agreement and dissolving the company will not have any material adverse impact on the group's financial performance or operations. The board considers this action to be in the overall best interests of the company and its shareholders.