Yunnan Water Investment, an integrated service provider in the municipal waste water treatment and water supply industries in mostly Yunnan province, has applied for a listing with the local bourse.
Its business is composed of four main segments: waste water treatment, water supply, construction and equipment sales, and others.
According to a report by EY, the company ranked first in 2013 in both the number of waste water treatment units and water supply facilities it operated in Yunnan.
For the six months to June 30, 2014, its waste water treatment segment accounted for 56.9 percent of revenue, water supply segment 33.1 percent, construction and equipment sales 4.6 percent and other activities 5.4 percent.
Yunnan Water plans to use the IPO proceeds to finance acquisitions of existing waste water treatment projects, invest in and develop new waste water treatment and water supply schemes in new markets.
Some funds from the proposed listing are to be used to repay part of the bank borrowings which stood at 330 million yuan (HK$410.27 million) as of end October last year. Yunnan Water established its foothold in Yunnan in 2009 and has expanded gradually to Xinjiang, Shandong and Jiangsu provinces from 2013. For the six months to June last year, 75.9 percent of its revenue still came from Yunnan.
It started water supply and waste water treatment businesses in 2009 through 29 operating subsidiaries and three joint venture companies held by Yunnan Province Water a state-owned enterprise and the firm’s controlling shareholder.
YWI’s predecessor, Yunnan Water Co. was set up in June, 2011.
Yunnan Province Water transferred its equity interests in 29 operating subsidiaries and three joint venture companies worth 663.5 million yuan to YWI along with 67 million yuan in cash in exchange for a 51 percent stake. Also, Shenzhen-listed Beijing OriginWater invested 600 million yuan in cash to take a 49 percent stake.
In May 2013, as an incentive to staff, Beijing OriginWater transferred 4.9 percent equity to 29 management shareholders for 72 million yuan.
After a reorganization and a hike in registered capital, the company is currently 45.43 percent held by Yunnan Province Water, 33.23 percent by Beijing OriginWater, 3.38 percent by 27 senior staff and the rest by several companies.