Data from Bloomberg, 2 September 2015 |
Dalian Dongda Water generated profit before tax of Rmb 50 million for FY2014, or 14% of the Group's Rmb 347 million for the same financial year.
The proposed acquisition is expected to be earnings, cash flow and returns accretive, without significant impact on gearing. The Group does not intend to raise capital for the acquisition.
The acquisition will be made through the Group's wholly-owned subsidiary Beijing Everbright Water Investment Management Co, to acquire 90% in Dalian Dongda Water for Rmb 800 million (S$177 million).
A first tranche of Rmb 302.2 million (38% of acquisition consideration) will be paid for an 34% interest within 30 days of the agreement date of 28 August. A second tranche of Rmb 497.8 million will be paid for the another 56% within 60 days. The remaining 10% will be transferred over the subsequent 3 years.
There is also a contingent payment of up to Rmb 203.15 million, subject to outstanding receivables of the same amount being recovered by the Group.
Dalian Dongda Water has 17 municipal waste water treatment projects in the province of Liaoning and in the Inner Mongolia autonomous region, a combined contractual operating scale of 1.125 million tons per day. It also provides water improvement services, the construction and operation of urban public utilities and infrastructure for sewage treatment plants.
The acquisition will expand the Group's operating assets of 32 waste water treatment projects (with total capacity of about 3.4 million tons a day), and add to its capabilities to supply services for reusable water, waste water heat pump, sludge treatment, R&D of environmental water technologies, engineering and construction.
