Sime Darby plans to sell Weifang Water for US$68m

KUALA LUMPUR: Sime Darby Bhd yesterday announced the proposed divestment of its Chinabased water management business, Weifang Sime Darby Water Management Co Ltd (Weifang Water), for US$68 million (RM275.31 million).

In a statement, Sime Darby said Weifang Water would be sold to Shandong Water Environment Protection Group Co Ltd, a stateowned company that was also involved in the water management business.

The divestment is part of the group’s strategy to rebalance its portfolio and focus on its core businesses.

It is expected to be completed in the second half of this year with the proceeds to be utilised to pare down borrowings and/or to fund the group’s operations.

Located 2km north of Yangzi Town in the Shandong province, Weifang Water operates two water treatment plants with a daily total capacity of 140,000 cubic metres and has a 220km pipeline network covering twothirds of the Binhai Economic Development Area.

It was reported in February that Sime Darby was exploring opportunities to monetise its RM2.4 billion investment in the logistics business in Shandong, China.

Group chief executive officer Jeffri Salim Davidson said its investment in Shandong comprised Weifang Sime Darby Port, three river ports and a water treatment plant.

“Monetising basically means we are taking money out of the business and selling part of it.

“Listing is probably a bit difficult because it is too small to be meaningful,” he was quoted as saying.