Letter of Acceptance For The Coastal 3-town Water Intake Engineering Project, Nan An Municipality, Fujian Province, People's Republic Of China
BackSep 11, 2007
| General Announcement |
| Reference No CC-070911-58914 |
| Company Name |
:
|
SALCON BERHAD |
| Stock Name |
:
|
SALCON |
| Date Announced |
:
|
11/09/2007 |
 |
|
|
| Type | : | Announcement |
| Subject | : | Letter of Acceptance for the Coastal 3-Town Water intake Engineering Project, Nan An Municipality, Fujian Province, People's Republic of China |
Contents :
Further to the announcement of 17 August 2007, the Board of Directors of Salcon Berhad is pleased to announce that the Company has received a Letter of Acceptance ("LA") dated 11 September 2007 from the People's Government of Nan An Municipality, Fujian Province, People's Republic of China ("PRC") for the Coastal 3-Town Water Intake Engineering Project ("Project") on Build-Operate-Transfer basis.
The Project involves the investment, construction, operation, management and maintenance of a 48km raw water pipeline to supply raw water to Guan Qiao, Shui Tou and Shi Jing Towns ("Coastal 3-Town"). The Project will be implemented in two (2) phases, that is 170 MLD in the Phase I and 175 MLD in the Phase II bringing a total of 345 MLD of raw water to the Coastal 3-Town. The Nan An Government has agreed to a minimum purchase guarantee for the first eight (8) years of commercial run.
The Project will be carried out by a joint venture company ("JVCo") to be incorporated, and Salcon Fujian (HK) Limited ("SFHK"), Hong Kong and the Nan An Government will hold 65% and 35% interest respectively in the JVCo. SFHK is a wholly-owned subsidiary of the Company.
The investment cost of the Project is estimated at CNY368 million (approximately RM172 million). The concession period is 30 years from the date of commencement of construction work, and the commercial run is expected to start in 2009.
The Project will not have any significant effect on the earnings or net assets of Salcon Group for the financial year ending 31 December 2007, and the share capital of the Company. However, it is expected to contribute positively to the future earnings of Salcon Group.
The risk factors for the Project include but not limited to those associated with changes in the economic, political and regulatory conditions in the PRC such as changes to government policies and administration, interest rates, taxes and exchange control regulations.
A joint venture agreement, concession agreement and bulk sale agreement will be signed within one (1) month from the date of the LA, and an announcement thereon will be released to Bursa Malaysia Securities Berhad accordingly.
None of the Directors and/or major shareholders of the Company, or persons connected with them have any interest, direct or indirect, in the Project.
This announcement is dated 11 September 2007