According to Zhito Finance APP report, Kangda Env (06136) announced that on November 18, 2024, the company's indirect wholly-owned subsidiary Chongqing Kangda and Pingdingshan Kangda (as the transferor), Wugang City Jieyuan (as the transferee) entered into an asset transfer agreement with the Wugang City government, where the transferor agrees to sell and Wugang City Jieyuan agrees to purchase the related assets for a price of 57 million yuan.

According to the terms and conditions of the asset transfer agreement, the transferor agrees to sell and Wugang City Jieyuan (as the transferee) agrees to acquire, including but not limited to: the franchise rights related to the sewerage treatment plant; the sewerage treatment plant and its corresponding facilities; the sewerage treatment fees owed by the Wugang City government to Pingdingshan Kangda (including overdue interest and fees); and all rights and obligations held by the transferor under the franchise agreement (collectively referred to as the 'related assets').

Considering the current operation status of the sewerage treatment plant and future operating costs; the potential capital expenditures for upgrading and renovating the sewerage treatment plant facilities and equipment; and the aging of the sewerage treatment fees owed by the Wugang City government, the board of directors believes that the asset transfer will save the group a significant amount in operating expenses and potential capital expenditures related to the sewerage treatment plant, generating immediate cash inflow from realizing related assets, and reallocating time and resources to other more profitable franchise projects.

In addition, the asset transfer is aligned with the Wugang City government, which is acquiring municipal assets, including the related assets. The transferee of the asset transfer is an enterprise designated by the Wugang City government and is wholly owned by the Wugang City State-owned Assets Supervision and Administration Commission. Although the price is lower than the book net value of the related assets, considering the financial and capital needs for the continued operation of the sewerage treatment plant and the aging of the sewerage treatment fees owed by the Wugang City government, the board of directors believes that the price is fair and reasonable.