The metals recycling company Chiho-Tiande Group Ltd., based in Hong Kong, has announced that its wholly owned subsidiary Chiho Renewable Development Ltd. (CRDL) has reached an agreement with the senior management of Scholz Group to acquire the entire share capital in Scholz Holding GmbH at a cash consideration of €1.
Scholz Holding is a Germany-based metals recycling company with a presence throughout Europe, Asia and North America.
Pursuant to the share purchase agreement, CRDL will acquire all 50 million shares in Scholz. Upon closing of the proposed acquisition, Scholz will become a wholly owned subsidiary of CRDL and an indirect wholly owned subsidiary of the group.
According to CRDL, at present Scholz is significantly over-leveraged, thus its equity value is currently negative. To restructure and strengthen the German company’s financial position, Chiho-Tiande has provided a significant cash infusion. The result, according to the Hong Kong-based company, has been to deleverage Scholz’s financial position, ensuring the company’s success as a going concern. Further, as Scholz’s largest creditor, Chiho-Tiande has had the opportunity to acquire shares in the company, provide a bridge loan to the company, assume the rights and obligations under the credit agreements from U.S. lenders on certain subsidiaries of Scholz and enter into a restructuring agreement, which includes partially releasing the German debt to prepare for the proposed acquisition.
In a news release, Tu Jianhua, chairman of Chiho-Tiande, says, “We are very pleased and excited to announce this proposed acquisition. We believe the proposed acquisition, when completed, will not only give Chiho-Tiande access to stable upstream material supplies from Europe and the U.S., as well as one of the world's best end-of-life vehicle dismantling and processing technology but also Scholz Group's technological capabilities and know-how to enhance our recycling operations and boost our clientele. We expect to benefit from the synergies between Chiho-Tiande and Scholz Group, giving us the competitive advantages to perfect our recycling operations and grow profit and ultimately build Chiho-Tiande into a leading global mixed metal scrap recycling enterprise.”