China Growth Stocks

[swampdonkey]

yes i believe it was an over reaction. In essence CREG entered into a JV with Erdos Metallurgy to finance, design build & operate energy transfer systems to Erdos plants. The JV would sell back wasted energy to Erdos. It appears that there are at least 3 plants in the pipeline with this company alone
The latest press release disclosed vague details on the loan offered to the JV




On April 14, 2009, the Company incorporated a joint venture ("JV") with Erdos Metallurgy Co., Ltd. ("Erdos") for recycling waste heat from Erdos 's metal refining plants to generate power and steam, which will then be sold back to Erdos. The name of the JV is Inner Mongolia Erdos TCH Energy Saving Development Co., Ltd ("Erdos TCH") with a term of 20 years, and the registered capital of JV is $2,635,000 (RMB 18,000,000). On September 30, 2009, Xi'An TCH injected additional capital of $4.03 million (RMB 27,500,000). Total investment for the project is estimated at approximately $74 million (RMB 500 million) with an initial investment of $8,773,000 (RMB 60,000,000). Erdos contributed 10% of the total investment of the project, and Xi'an TCH contributed 90% of the total investment. Xi'an TCH and Erdos will receive 80% and 20% of the profit allocation from the JV, respectively, until Xi'an TCH has received a complete return on its investment; Xi'an TCH and Erdos will then receive 60% and 40% of the profit allocation from the JV, respectively. When the term of the JV expires, Xi'an TCH will transfer its equity in the JV to Erdos at no additional cost.