15 Jan 2021
Everbright Water Purchases Majority Equity Interest in Tianjin Binhai New Area Huantang Sewage Treatment Co., Ltd.
Exploring SOE Mixed-Ownership Model and Tapping into Tianjin's Water Market to Solidify its Leading Market Position
Singapore and Hong Kong, 22 January 2021 – China Everbright Water Limited ("Everbright Water" or the "Company", stock codes: U9E.SG and 1857.HK) (中國光大水務有限公司), an environmental protection company focusing on water environment management, is pleased to announce that the Company has entered into an equity transfer agreement, a supplementary agreement to the equity transfer agreement and a cooperation agreement with Tianjin Binhai Environmental Protection Asset Development Co., Ltd. through the Company's indirect wholly-owned subsidiary, Beijing Everbright Water Investment Management Co., Ltd. Pursuant to the relevant agreements, Everbright Water purchases 65% equity interest in Tianjin Binhai New Area Huantang Sewage Treatment Co., Ltd. ("Huantang Company") (the "Transaction"), for a consideration of approximately RMB666 million.
Huantang Company is currently a wholly state-owned enterprise. Upon completion of the Transaction, it will be converted into a mixed-ownership enterprise. As a major water treatment enterprise in the Binhai New Area of Tianjin Municipality, Huantang Company's main business scope includes waste water treatment and recycling; pipeline engineering; municipal engineering; construction, management, operation, technical consultation and ancillary services of waste water treatment and reusable water facilities; research and development and operation of environmental protection technologies and environmental protection products; utilisation and operation of renewable resources; sludge dewatering treatment and its application. Huantang Company currently has two waste water treatment projects and one reusable water project, with an aggregate designed daily water treatment capacity of 220,000 m3 and a pipeline network of 49km in length.
Everbright Water's purchase of the majority equity interest in Huantang Company marks the Company's first attempt under the mixed-ownership reform of China's state-owned enterprises (‘SOE Mixed-ownership Reform'), and is regarded as a precedent of the SOE Mixed-ownership Reform in Tianjin and the Binhai New Area. It not only demonstrates the firm actions taken by Everbright Water in response to the country's guidance and opinions on the SOE Mixed-ownership Reform, but also marks the Company's venture into a new geographical market and a good start in Tianjin's water market. Upon completion of the Transaction, Everbright Water will fully ride on its strengths in business, management, capital and industry resources, to optimise business and resource allocations, and to smoothly carry out integration work. In the meantime, the Company will accumulate relevant experience so as to act as a role model in the SOE Mixed-ownership Reform. In the future, Everbright Water will leverage on the water projects of Huantang Company to further develop and improve the local water business platform, with the aim of laying a solid foundation for potential water projects in Tianjin and the surrounding areas, as well as for market development in the Beijing-Tianjin-Hebei region.