CITIC and KKR jointly have formed a consortium to make a pre-conditional voluntary offer (VGO) for all the shares in United Envirotech Ltd (UEL).
UEL is a Singapore-listed membrane-based water and waste-water treatment and reclamation solution provider with businesses mainly in China’s chemical, petrochemical and industrial park sectors.
The transaction allows CITIC to become the controlling shareholder of UEL through the holding of a majority interest in the consortium. This will be achieved by the consortium through the VGO subject to conditions being met, to acquire existing shares in UEL from the existing shareholders including KKR. In addition, after the VGO, the consortium will subscribe for further shares in UEL by way of a private placement totalling SGD50m, SGD100m or SGD150m which will provide additional capital to UEL. The offer price values UEL at approximately SGD1.9bn on fully diluted basis. The consortium intends to maintain the listing status of UEL post transaction.
This investment allows CITIC to grow its businesses in environmental protection, an area with significant growth potential in China. The transaction will also provide capital for UEL’s further expansion.
Wang Jiong, vice chairman and president of CITIC Limited and chairman of CITIC Environment Protection Co Ltd, says: “Our investment in UEL provides us a strong platform to develop in China's water and wastewater treatment sector. Environmental protection is a top priority for China, and CITIC foresees not only commercial opportunity but also societal benefit from this investment. We are always seeking strategic and forward looking opportunities such as this which we believe will create value for our shareholders.”
KKR’s co-founder, co-chairman and co-CEO Henry Kravis says: “We are pleased to announce the formation of our partnership with CITIC. It is a world-class company and our experienced team on the ground in China will also leverage KKR’s global expertise and experience to make this a highly successful endeavour.”
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