Wed, May 07, 2014 - Page 13 News List

Rich Development inks wastewater deal

By Crystal Hsu  /  Staff Reporter

Rich Development Inc (力麒建設) yesterday inked a deal to sell a 30 percent stake in a subsidiary to a Chinese firm, allowing the two sides to jointly tap wastewater treatment markets across the Taiwan Strait.

Under the investment pact, Rich Development will sell a 30 percent share in its fully owned subsidiary Hejing Enterprise (鶴京企業) to two subsidiaries of Beijing Enterprise Group (北控集團) for NT$1.49 billion (US$49.24 million), or NT$49.5 per share.

The two Chinese subsidiaries are BHL Taipei Ltd (京泰發展) and Beijing Enterprises Water Group Ltd (北控水務), who are to acquire shares of 25 percent and 5 percent respectively in Hejing Enterprise, a Taiwanese maker of wastewater treatment machinery.

The deal suggests a generous premium of 2.34 times Rich Development’s market value, based on its closing share price at NT$14.8 yesterday, Taiwan Stock Exchange data showed.

“The strategic alliance would allow both sides access to the wastewater treatment business in bilateral markets,” Rich Development chairwoman Kuo Shu-chen (郭淑珍) told a news conference in Taipei.

The Taipei-based developer would use the premium to strengthen its capital and net worth, which would increase from NT$16.76 per share to NT$17.15 per share, she said.

Rich Development has been aggressively expanding into tourism and green environment businesses in recent years to boost profits and diversify its sources of income.

With total assets of 200 billion yuan (US$32.12 billion), Beijing Enterprise is the largest state-owned business conglomerate in China’s capital and has set up an office in Taipei.

The alliance will also benefit Forest Water Environmental Engineering Ltd (山林水工程), Rich Development’s engineering arm, company general manager Wu Jen-chien (吳人傑) said.

The cooperation promises massive business opportunities for both partners, given the low sewage-treatment penetration in Taiwan and China, he said.

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