SGX Mainboard-listed water treatment and environmental protection company SIIC Environment Holdings Ltd. has announced that the company has entered into two conditional sale and purchase agreements for the combined acquisition of 32.6562% of the equity interest in Longjiang Environmental Protection Group Co., Ltd for a total aggregate consideration of RMB836million.
As at the date of this announcement, SIIC Environment has an equity interest of 25.3125% in Longjiang Environmental. Following the Proposed Acquisition, the Company will have an equity interest of 57.9687% in Longjiang Environmental, for which Longjiang Environmental will become a subsidiary of the Company.
Longjiang Environmental is principally engaged in the business of development and operation of environmental protection related projects and construction and operation of water supply network, and holds 41 projects in the PRC, with a total water treatment and supply design capacity of 3.55 million tons/day and sludge handling design capacity of 1,330 tons/day.
Since SIIC Environment acquired 25.3125% of the equity interest in Longjiang Environmental in 2014, SIIC Environment has experienced a growth in contribution to SIIC Environment’s financial performance. For FY2015, the Group’s share of results of associates and joint ventures increased 29.6% year-on-year to RMB78.2 million, primarily due to the contribution from Longjiang Environmental. Longjiang Environmental has a track record of more than 10 years in the PRC’s water industry, and will be positioned as a business platform in the Northeast region of the PRC for further market expansion and industry consolidation.
After the completion of the acquisition of Longjiang Environment, the total water treatment capacity of SIIC Environment will be above 10 million tons/day.