SIIC

SIIC: (S$0.15) Proposed Rmb1.5b acquisition of water treatment business
SIIC Environment has proposed to make a Rmb1.5b ($348.3m) acquisition acquire a water treatment business with operations in four provinces in China, with a planned capacity of over 1m tons/day.

The purchase price comprises Rmb1.1b ($240.5m) for Global Environment Investment (HK), which owns 92.2% stake in Fudan Water Engineering and Technology (FWET), as well as an outstanding debt amounting to Rmb479.2m ($107.8m) held by the former.

Consideration will be done via cash (Rmb151.7m) and an issue of 1,560m new shares (14% enlarged share capital) at an issue price of $0.132/share.

FWET is currently working on 10 water treatment projects located in Shanghai, Jiangsu, Zhejiang and Guangdong provinces, with a planned water treatment capacity of over 1m tons/day.

At the current price, SIIC is valued at a proforma 1.7x P/B and 20.5x trailing P/E. Bloomberg consensus has 5 Buys and 1 Sell rating on the counter, with an average 12-month TP of $0.22.