Salcon selling off China water concessions for RM518m
KUALA LUMPUR: Salcon Bhd is selling its water concessions in China for RM518 million to focus on water business in the country and expand its property development.
The group, late yesterday, announced that it is disposing of all its shares in six water companies in China to Beijing Enterprise Water Group Ltd for some RM518.3 million.
Upon completion, the deal will bring in total cash of RM284 million and profit of RM94.6 million, and result in zero borrowing to the group.
The unlocking of these investments will allow Salcon to focus on its water business here and the newly-ventured property development business, said executive director Datuk Eddy Leong.
Property development, Leong said, will likely take over the company's water and wastewater engineering business in less than two years.
Salcon also announced that its subsidiary, Nusantara Megajuta Sdn Bhd, has signed a letter of intent with Eco World Development Sdn Bhd to jointly develop land measuring 5ha in Johor, owned by Salcon.
Leong said both Salcon and Eco World will develop the land into a mixed project with an estimated gross development value of over RM1 billion.
The project, to be launched next year, will be Salcon's second property project after the one in Selayang.
Leong, who is also on the board of Eco World and was a former independent non-executive director of SP Setia Bhd, said Salcon is actively looking for more land in the Klang Valley, Johor and Penang.
Eco World is also linked to two other individuals: Tan Sri Abdul Rashid Abdul Manaf, SP Setia's ex-chairman; and Liew Tian Xiong, the son of Tan Sri Liew Kee Sin.
On the company's water business, Leong said RM1.7 billion worth of contracts in water and waste water concession have been tendered. The company is also looking for water deals in Sri Lanka and Indonesia.