Fujian Yongan Forestry sues supplier over $209.4m in undelivered equipment funds

Fujian Yongan Forestry Group Joint-Stock Co., Ltd. has filed a lawsuit against Biao New Energy Technology Co., Ltd. for 209.4 million yuan regarding unreturned equipment procurement funds. The company's wholly-owned sub-subsidiaries, Yongan Dan Cheng County Bioenergy Co., Ltd. and Yongan Zhuozhou Bioenergy Co., Ltd., are each seeking the return of 104.7 million yuan. The Yong'an City People's Court has accepted the case.

The dispute stems from procurement contracts signed in 2023 for equipment and operational services related to biomass energy cyclic utilization projects. Yongan Dan Cheng County Bioenergy Co., Ltd. and Yongan Zhuozhou Bioenergy Co., Ltd. each paid a first installment of 104.7 million yuan to Biao New Energy Technology Co., Ltd., but the equipment was never delivered. In March 2024, Fujian Yongan Forestry decided to halt investment in biomass energy projects due to construction and management issues and potential risks.

The company is seeking to terminate the related equipment procurement agreements and obtain a refund of the 209.4 million yuan, plus overdue interest calculated at the one-year LPR from the date the judgment takes effect until actual payment. The impact on Fujian Yongan Forestry's current and future profits remains uncertain as the case has not yet gone to trial.