United Envirotech says it has signed the sales and purchase agreement to acquire a water supply plant and a wastewater treatment plant in Changyi City, Shandong Province, China.
UEL will set up a 70%:30% joint venture company with the existing shareholders of the plants for the acquisition in which UEL will hold 70% of the JV.
Changyi City is well known for its textile industry. The water plant supplies industrial water and the wastewater plant treats industrial wastewater from the textile companies located in the industrial parks in Changyi.
The design capacities of the water supply and wastewater treatment plants are 40,000 cubic metre/day each. The wastewater treatment plant is currently operating at near full capacity.
The water supply plant is expected to start operation in the second quarter of this year.
The total investment by UEL is approximately RMB 165 million ($33 million).
Some RMB 105 is for acquiring the two plants and about RMB 60 million is for the modification and upgrading of the existing wastewater treatment plant using UEL’s advanced membrane technology.
The project will be funded by the proceeds from the convertible bond issue to KKR, internal resources and bank financing.
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