Salcon to grow the M&A way
Salcon Bhd is looking at mergers and acquisitions to grow itself in a bid to fast track its listing plan for its China water and waste water concessions within the next two years.
SUBANG JAYA: Salcon Bhd is looking at mergers and acquisitions (M&A) to grow itself in a bid to fast track its listing plan for its China water and waste water concessions within the next two years.
Salcon chief operating officer Ooi Cheng Swee told reporters that the company aimed to have a combined plant capacity of 3,000 million litres per day ( MLD) in China and was targeting to achieve this via a combination of organic growth and M&AS with existing plant operators who have sizable assets in China.
“We do have parties talking to us, and it is maybe too early to disclose them,” he said after signing an agreement to acquire a 60% stake in Darco Environmental Pte Ltd, a unit of Darco Water Technologies Ltd, for Rm47.5mil.
Darko Environmental is an integrated engineering and knowledgebased water treatment solutions provider.
Darco Environmental runs two water treatment plants in Deqing country in the Zhejian province in China, namely Wukang and Qian Yuan, which have a 60 MLD and 100 MLD capacity respectively. The company expects to fund 80% of the acquisition via bank borrowing and the balance from internal funds.
The Wukang and Qian Yuan plants have a 25-year and 22-year concession period respectively, and is estimated to generate total revenue of Rmb1.7bil (Rm842.5mil) throughout the entire concession. “Both plants have a second phase which would ensure the water supply for the next 25 years, and we are now talking to the government to upgrade the Wukang plant’s facility. Weare looking at implementing the phase two of an additional 60 MLD in the next 12 months,” he said.