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The vendor is Global Environment Investment.
The target company owns all of Global Environment Investment (HK), which in turn owns 92.15% of Fudan Water Engineering and Technology Co.
The target company and the HK company are investment holding companies.
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Fudan Water operates about10 projects in Shanghai City, Jiangsu, Zhejiang and Guangdong provinces, with a planned water treatment capacity of over 1 million tons/day.
The vendor shall be paid in the following manner:
(a) RMB151,701,741 by cash as deposit; and
(b) the balance RMB917,118,259 by 1.56 billion new ordinary shares of SIIC Environment at an issue price of S$0.1320 per share.
Zhou Jun, executive chairman of SIIC, with analysts and investors. NextInsight file photo.The issue price represents a discount of 12.2% to the volume-weighted average price of SIIC shares traded on the SGX-ST on 24 March 2015, the full market day on which the sale and purchase agreement was signed.The net profit attributable to the 92.15% equity interest in Fudan Water Group for 2014, based on PRC unaudited management accounts, amounted to RMB89.4 million.
Had the acquisition been effected on 1 January 2014, the earnings per share of SIIC would have risen from 2.90 RMB cents to 3.31 RMB cents.
That translates into a PE of about 23X based on the recent stock price of 16.4 cents.
For details see SIIC announcement here.
