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AnnAik to build and operate S$13m yuan wastewater treatment plant
CATALIST-LISTED AnnAik has landed a wastewater treatment plant project in China, the group announced after the market closed on Monday. Subsidiary ChangXing LinSheng Wastewater Treatment Co (CX LinSheng), in which AnnAik has an 88 per cent stake, has been awarded additional service concession rights to build and operate the plant in Lincheng, under an extension investment framework agreement with the municipal government.
The plant will be designed with a total daily wastewater treatment capacity of 10,000 tonnes. Based on a price of 1.50 yuan per tonne, the plant shall treat at least 60 per cent of targeted total capacity in the first two years of operation, and at least 80 per cent of targeted total capacity from the third year onwards. If CX LinSheng is unable to treat the targeted capacity at the specified price due to a lack of demand, the municipal government will provide a guarantee.
Construction of the plant is expected to be completed by the third quarter of 2019. Concession rights will begin from when the plant starts commercial operations.
The total investment for the project is estimated at up to 13 million yuan (S$2.59 million), subject to relevant final approval. The group's investment will be funded by internal resources and bank borrowings. This is not expected to have any material impact on the net tangible assets or earnings per share for the financial year ending Dec 31, 2018, although the project is expected to contribute to the net tangible assets or earnings per share for the following financial year.