Ranhill Water Technologies (Cayman) Ltd (“RWT Cayman”), a subsidiary of Ranhill Holdings Berhad (“Ranhill” or “Company”) has, on 31 August 2016, entered into a term sheet (“Term Sheet") with SIIC Environment Holdings Ltd (“SIIC”) to divest 60% of Ranhill Water (Hong Kong) Ltd (“RWHK”), a wholly-owned subsidiary of RWT Cayman to SIIC.

“In line with our intention to seek strategic partnership to further our business expansion in China, we foresee SIIC and its subsidiaries may be able to open tremendous investment opportunities for Ranhill in China”, said Tan Sri Hamdan Mohamad, President & Chief Executive of the Company. “We could also tap into SIIC’s local knowledge and strong business alliances to help facilitate the procurement of industrial wastewater concessions, tariff adjustments and arrange for project financing with competitive terms. This is not just a divestment of asset but also a formation of strategic partnership with SIIC and its subsidiaries”, he added.

“Ranhill has been investing into the China wastewater business for the past 8 years and we are of the view that the time is right for us to realise part of the value of our investments while at the same time expanding the reach of the business”, Tan Sri Hamdan further explained.

SIIC presently has over 80 water treatment and supply projects with a total design capacity of more than 7 million tonnes per day and 4 waste incineration projects across 15 municipalities and provinces, namely Shandong, Guangdong, Hubei, Hunan, Jiangsu, Shanghai, Zhejiang, Fujian, Guangxi, Ningxia, Henan, Liaoning, Shanxi, Sichuan and Heilongjiang.

The strategic partnership also works both ways as SIIC is also actively seeking to expand its competencies to include related sectors such as industrial wastewater treatment, seawater desalination, sludge treatment and handling, soil treatment and new energy resources. The Company believes the cooperation between Ranhill and SIIC will complement in terms of business activities and will bring synergy for future growth by providing broader access to potential clients and target markets.

The Indicative Divestment Consideration for the 60% RWHK Shares of RMB273.9 million (equivalent to RM167.0 million) shall be settled entirely via cash. Both parties is to enter into a sale and purchase agreement (“SPA”) within 30 days from the date of signing the Term Sheet. SIIC has also agreed to provide US$30 million shareholder’s loan to RWHK, proportionate to its eventual shareholding, upon completion of the Proposed Divestment.