Business

BCorp sells wastewater treatment operation in China

KUALA LUMPUR: Berjaya Corp Bhd (BCorp) is selling a China-based unit that holds a 25-year concession to develop and operate a wastewater treatment plant in Foshan City for 78.5 million yuan (RM50.3mil).

In a filing with Bursa Malaysia, the diversified group said it inked an agreement to dispose of its entire 100% stake in Berjaya Green Resources Environmental Engineering (Foshan) Co Ltd (BGREE) to Foshan Water & Environmental Investment Co Ltd.

BCorp said Foshan Water had also agreed to repay in full the sum of about 28.4 million yuan (RM18.2mil) owed by BGREE to BCorp as at Aug 31. 

“The consideration for the proposed disposal was based on the enterprise value of BGREE of about 167.90 million yuan after taking into consideration, among others, the valuation of the business/concession, earnings potential and future prospects of BGREE and after adjusting for the debts and cash of BGREE,”  it said.

BGREE has a concession expiring in March 2039 to develop, operate and manage a 40-million-litres-per-day wasteater treatment plant in Jinben Industrial Park under the build-operate-transfer concept.  It services beverage factories such as Budweiser, Coca-Cola and Yeo’s.

For the financial year ended April 30, 2017, BGREE recorded a loss before tax of 8.79 million yuan, which was slightly higher than 7.4 million yuan in the previous year.

However, BCorp said in its 2017 annual report issued last month that BGREE’s raw wastewater treatment operation was expected to be profitable from the 2018 financial year onwards.

In its Bursa announcement, BCorp said the proposed disposal was an opportunity for the group to realise its investment in BGREE.

BCorp’s original cost of investment or its carrying value in BGREE as at April 30, 2017, was 47.60 million yuan, incurred since 2010.

BCotp expected the proposed disposal to be completed by the first quarter of 2018.