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CITIC Envirotech unit secures 3b yuan river restoration project in Ningbo

A PROJECT company controlled by environmental engineering firm CITIC Envirotech has secured a three billion yuan (S$610 million) project to restore the rivers in an eastern Chinese city.

CITIC Envirotech will invest S$366 million in the project. The sum will be funded by perpetual bonds, it said in a filing to the Singapore Exchange (SGX) on Thursday evening.

The unnamed project company will invest in, design, construct, procure and commission projects to restore the rivers and their surrounding environment in Ningbo city's Feng Hua district, said SGX mainboard-listed CITIC Envirotech.

CITIC Envirotech owns 60 per cent of the project company. Another company called CITIC Oasis owns 35 per cent of the company. The local government owns the remaining 5 per cent.

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The first phase of the project, valued at about 1.4 billion yuan, will start immediately. It will see the project company work on the restoration of 25 rivers and their surrounding landscape.

Each stakeholder in the project company will contribute to the total investment value in proportion to their respective equity interest in the joint venture company, said CITIC Envirotech. As such, CITIC Envirotech's proportionate total investment in the project will be about S$366 million.

This sum represents about 29.5 per cent of the audited net tangible assets of the group as at Dec 31, 2016 of S$1.24 billion.

The capital injection to be provided by the company for the joint venture will be funded from the proceeds of the issuance of the US$180 million worth of 5.45 per cent senior perpetual securities, pursuant to its US$750 million multi-currency perpetual securities issuance programme and bank financing.

CITIC Envirotech's counter closed 1.96 per cent lower to S$0.750 on Thursday before the announcement.