The Straits Times / The Business Times News on Hyflux

World Bank arm to invest in Hyflux venture

HYFLUX has managed to rope in the World Bank as a business partner, a move which will help the company increase its business in China and India.

Yesterday, the water treatment company said the International Finance Corp (IFC), the commercial lending arm of the World Bank, has agreed to invest in Hyflux's 50 per cent-owned SinoSpring operation, which has eight projects in China.

Trading in Hyflux shares was suspended for just under two hours yesterday afternoon pending the release of the announcement.

IFC is expected to take an equity interest in SinoSpring of up to US$20 million. SinoSpring's other 50 per cent shareholder is RB (Labuan) Ltd, and it is expected that Hyflux will retain its 50 per cent equity in SinoSpring after IFC's proposed investment.

Hyflux president Olivia Lum said IFC will be a valuable partner in supporting the company's growing business in China and elsewhere, notably India.

'Such collaboration opens up for us another source of capital (both equity and debt) and expertise. With this arrangement, we will be able to continue to strengthen our strategy to build projects with long term recurring stream in China and other markets,' Ms Lum said.

SinoSpring was set up to develop and own BOT/BOO (build, own and transfer or build, own and operate) projects in the treatment of water, seawater and wastepaper in China.

Its eight projects in China include a US$90 million, 100,000 cubic metres per day seawater desalination plant in Tianjin and a 50,000 cubic metres per day desalination plant in Lianning province.

Hyflux closed 29 cents higher to $2.70 in heavy trade yesterday. Some 19 million shares changed hands compared to its daily six month average of 3.9 million shares.