Mitsui forms JV with Singapore’s Hyflux for water business in China
03 Aug 2010
One of Japan's largest business conglomerates Mitsui & Co Ltd has executed a joint venture agreement with Singapore's Hyflux Ltd, a leading provider of water management solutions, for large-scale water infrastructure business in China.
The newly established 50:50 joint venture company, Galaxy NewSpring Pte Ltd (Galaxy) with its head office in Singapore will acquire four water treatment plants owned by Hyflux and 18 water treatment plants held by Hyflux Water Trust (HWT), a public business trust which is also 31 per cent owned by Hyflux through its subsidiaries.
The initial portfolio comprising the four water treatment plants is valued at $53 million and the acquisition is expected to be completed by October 2010 by purchasing the shares of the holding companies of the assets.
Simultaneously, Galaxy has announced an exit offer to purchase the units of HWT at S$0.78 ($0.58) per unit. This represents a 17-per cent premium over last 1-month's volume weighted average price for the units. The offer is conditional upon Galaxy controlling at least 75-per cent of total voting rights as at close of exit offer.
Complete assets will include nine water treatment plants, 11 waste-water treatment plants, and two water recycling plants spread over eight rapidly developing Chinese provinces and will have a cumulative design capacity of 825,000 cubic metres per day after expansion.
Total value of the complete assets is estimated at around $230 million.