Shares of Synthesis Energy Systems, Inc. (NASDAQ: SYMX) touched a new 52-week high of $3.12 on Thursday. The company has agreed with China Energy Industry Holding Group Co. Limited for a cash investment of about $83.8 million to support the company's business strategy in China, including project development and investment.

China Energy has been formed by Zhongjixuan Investment Management Ltd. of Beijing for the purpose of investing in Synthesis Energy Systems. This agreement significantly strengthens the company's balance sheet and provides additional financial flexibility for Synthesis Energy Systems to execute on its business plan in China and around the world.

The Houston, Texas-headquartered Synthesis Energy Systems said China Energy will receive about 37.3 million shares of newly issued stock at closing, representing an approximate 43.5 percent ownership stake in Synthesis Energy, in exchange for about $83.8 million consideration.

China Energy is entitled to receive additional shares of common stock bringing their total ownership position to 60 percent on a fully diluted basis contingent upon Zhongjixuan Investment using best endeavors to establish a coal gasification joint venture with funding of about $3.0 billion for either synthetic natural gas, transportation fuels, power or fertilizers combined with the market value of Synthesis Energy's common stock reaching $8.00 a share or above on average for 20 consecutive trading days provided that the measurement period occurs six months after the closing.

In addition, Synthesis Energy will increase the size of its Board from seven to eleven directors with four individuals to be appointed by China Energy. Zhongjixuan Investment will appoint a managing director, who will report to Synthesis Energy's CEO, and be responsible for leading the Synthesis Energy business in China.

This strategy is designed to provide our proprietary technology and equipment to third parties through technology and equipment sales; make investments in projects that we develop, design, build and operate; and exploit unique opportunities to gain access to coal feedstock resources through implementation of our technology, said Robert Rigdon, Chief Executive Officer of Synthesis Energy Systems.

In addition to opening new doors for future coal gasification projects, we will now have the opportunity to accelerate the development of our existing and future projects in China, said Rigdon.

Zhongjixuan Investment, with extensive relationships throughout China, will assist Synthesis Energy in the development of new joint venture businesses to meet the needs of China's growing demand for clean energy based on lower cost/lower grade coals such as lignite.

Through these joint ventures, Zhongjixuan Investment will assist in the development of new project investments, provide opportunities to acquire low cost coal resources, work to secure additional partnerships and financing, obtain government approvals, as well as support the company's efforts with its current partners and projects.

Synthesis Energy stock gapped open sharply higher March 31 at $2.85 compared to previous day's close of $2.05. The stock touched a new high of $3.12 on Thursday. The stock closed Thursday's regular trading up 38.05 percent at $2.83 on a volume of 8.44 million shares on the NASDAQ Stock Market. The stock traded between $0.80 and $3.12 during the past 52 weeks.