X Diamond Capital (XDC), the joint venture (JV) partner of Metech International, has disposed of its shares in the joint venture company (JVCo), Asian Eco Technology, to Wu Yongqiang.

Wu is a controlling shareholder of Metech International with 23.76 million shares in the company, or a 15.68% stake of the company’s total voting shares, making this an interested person transaction (IPT) under the Catalist rules.

XDC and Wu had, on April 17, entered into a sale and purchase agreement (SPA) for the sale of 100,000 ordinary shares in the JVCo to Wu for a total consideration of $4 million, or $40 per share.

The sale shares represent 20% of the total paid-up and issued share capital of the JVCo.

The JVCo was incorporated on Sept 27, 2021, after the entry into a joint venture agreement (JVA) between Metech’s wholly-owned subsidiary Asian Green Tech and XDC.

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Following the disposal, Asian Green Tech, XDC and Wu now hold a respective 51%, 29% and 20% of the total share capital of the JVCo.

Under the terms of the SPA and the JVA, Wu will execute a deed of ratification and accession in favour of and for the benefit of AGT and XDC, agreeing to be bound by and entitled to the benefit of all the terms and conditions of the JVA which are applicable to it as a shareholder of the JVCo.

XDC had, on April 11, informed Metech of its intention to dispose part of its shareholder in the JVCo, in which it offered Metech the first right of first refusal.

At the time, a third party had indicated its willingness to acquire the 20% stake in the JVCo.

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The board of Metech, on April 14, decided to forgo the right. It then sought to get more details of the third-party buyer.

Wu, who is also advisor to the board of Metech, felt that it would be “cumbersome” to introduce a new party to the JVCo. Following a discussion with the other controlling shareholder of Metech on April 15, Wu then decided to make the offer to XDC at the same consideration.

The entry into the JV is not expected to materially impact Metech’s net tangible assets (NTA) per share and its earnings per share (EPS) for the current financial year ending June 30.

On April 12, Metech had received a query from the Singapore Exchange Regulation (SGX RegCo) following “unusual price movements”. At the time, shares in Metech closed at 23 cents, or 21.0% higher than its previous close of 19 cents on April 11.

The query was the second one made in the past four months.

At the time, Metech said that it was unaware of any information or possible explanation for the unusual trading activity.

As at 9.55am, shares in Metech are trading 2 cents lower or 7.41% down at 25 cents.

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