Water Utility Acquisition Supplies Water to Industry and Residents of 1,100,000
Beijing, China -- (ReleaseWire) -- 09/03/2008 -- New China Ventures Ltd. (OTC PK: NCVL), a Chinese water company involved in infrastructure development, consultancy and ancillary products and services, announces that negotiations have commenced to acquire a 20% interest in the municipal water system in Xinyu City, Jiangxi Province in central eastern China.
Xinyu City is a rapidly growing industrial area in Jiangxi Province and is located between two capital cities forming an economic circle within an 8 hours ride to Shanghai and Guangzhou cities with the Beijing-Kowloon Railway providing excellent north-south access.
New China Ventures proposes to acquire a 20% interest in the operating concession for the next 28 years. In the past year, after the privatization of the municipal owned operations, water revenues have increased from $12 million USD to $55 million (a 360% increase) due to increases in both residential and industrial usages, higher water tariffs; and net profits have increased from $7.3 Million USD to $20.8 Million USD (a 185% increase). Terms were not announced pending closing of the transaction. The water plant currently has a production capacity 79 million tons per year and is being expanded to increase production by an additional 54 million tons per year (a 68% increase) upon completion of current expansion work.
Mr. Shu Pu Yuan, President, New China Ventures, said, “The acquisition of Xinyu City water utility fits perfectly with our strategy to leverage our water consultancy expertise to own and operate Chinese municipal water systems. We intend to rapidly diversify through acquiring equity ownership in multi-year operating concessions of municipal water systems in selected high growth cities. We anticipate selecting areas, such as Xinyu City where the existing water facility is operating at capacity, and have the potential to double their population in the next 5-10 years, driven by the high level of urbanization in China today.”
“China’s lacks of water resources have become key constraints to its economic and social development with over 400 of 668 cities facing water supply shortages. This provides an excellent opportunity for NCVL’s services and products critical to the development of China’s water infrastructure. New China Ventures has a significant opportunity to grow as we strive to become a leader in serving Chinese water utilities and municipalities,” Mr. Yuan concluded.
The completion of the transaction is subject to various conditions, including among others the execution of definitive documentation, completion of due diligence, approval of the transaction and business plans by each companies' boards of directors, obtaining any necessary governmental and other third party authorizations and other customary conditions.
About New China Ventures Ltd.
New China Ventures Ltd. (OTC PK: NCVL), is a U.S. incorporated holding company that owns 100% of a Chinese water company involved in infrastructure development, consultancy and provisioning ancillary products and services, and is involved in the acquisition of equity interests in municipal water systems in China.
For more information on New China Ventures Ltd please visit our web site at: http://www.china-waterworks.com.
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