Ranhill Holdings Bhd's highly-automated wastewater treatment plant at Xiaolan Industrial Park in Nanchang, China. The flagship plant has a workforce of about 32 staff now.
KUALA LUMPUR: Ranhill Holdings Bhd has formed a strategic partnership with SIIC Environment Holdings Ltd, a top-tier integrated player in China’s environmental industry, by divesting a 60% stake in indirect unit Ranhill Water (Hong Kong) Ltd (RWHK) to SIIC for 273.90 million yuan (RM169.62mil).
In a filing with Bursa Malaysia, the water and wastewater treatment group said the tie-up with the Singapore-based SIIC group was essential for and complemented the continuous growth of Ranhill’s wastewater business in China, particularly in the industrial wastewater treatment sector.
“Ranhill believes such strategic partnership will facilitate the procurement of wastewater concessions in China by providing broader access to potential clients and target markets,” said the company, which has invested in China’s wastewater business for the past eight years.
It said that SIIC’s strong presence in China might open tremendous investment opportunities for RWHK, which provides consultancy, project management, operations and maintenance services in the republic relating to wastewater treatment plants.
“RWHK could tap into SIIC’s local knowledge and strong business alliances or relationships in China to grow the water business. SIIC may be able to facilitate the tariff adjustments and arrange for project financing with competitive terms,” Ranhill said.
It added that RWHK might also be able to provide services to SIIC’s existing water projects, including retrofitting the water and wastewater treatment plants.
SIIC has been operating in China’s water sector for over a decade. At present, the SIIC group’s portfolio boasts over 80 water treatment and supply projects and four waste incineration projects across 15 municipalities and provinces.
On Tuesday, Ranhill began the partnership when its unit Ranhill Water Technologies (Cayman) Ltd (RWT Cayman) inked an agreement to sell its 60% equity interest in wholly-owned subsidiary RWHK to Asia Wisdom Investments Ltd, an indirect unit of SIIC.
As part of the terms of the proposed divestment, RWHK is required to undertake an internal restructuring prior to the completion of the divestment.
This involves transferring a 51% equity interest in Ranhill International Trade (Hong Kong) Investment Ltd and 100% interest in Ranhill Venture (Hong Kong) Ltd to RWT Cayman or another company to be identified by Ranhill.
Ranhill, which operates two 190 MW power plants in Kota Kinabalu in a joint venture with Sabah Energy Corp Sdn Bhd, said of the estimated proceeds of RM169.1mil from the divestment, it was allocating RM120mil for investment in new power projects and RM37.58mil for working capital.
The proposed divestment is expected to be completed by the fourth quarter of 2016.
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