SHANGHAI Chengtou Corp, a government investment arm for urban construction, will list its real estate and environment businesses valued at more than seven billion yuan (US$933 million) through a back-door listing, its subsidiary said yesterday.
Shanghai Raw Water Co Ltd, in which it holds a 46-percent stake, will sell 413.7 million shares to Shanghai Chengtou at 15.61 yuan apiece, and pay an extra seven million yuan in cash for the injection of the assets, according to a document filed to the Shanghai Stock Exchange. Shares of Shanghai Raw Water fell 1.81 percent to 17.91 yuan yesterday.
The deal, still pending approval from the securities regulator and its shareholders, will allow injection of Shanghai Chengtou's assets in real estate development and environment treatment valued at 7.18 billion yuan.
The environment division builds and operates the residential garbage treatment facilities in downtown Shanghai, including incineration power plants. It has also invested in construction and operations of garbage incinerators in other mainland cities.
Shanghai Chengtou Zhidi (Group) Co Ltd, one of the city's top property developers, has developed two million square meters of real estate by September. It has also refurbished some historical buildings in the city.
If approved, the deal will help Shanghai Raw Water, the city's largest fresh water supplier and its largest sewage treatment facility operator, more than triple its revenue to 3.49 billion yuan next year. Net profit should surge 167 percent to 1.36 billion yuan.