Puncak Niaga to sell Luwei Co, exit China market

PETALING JAYA: Puncak Niaga Holdings Bhd is planning to exit the China market by disposing of its loss-making water treatment unit held by its 98.65% subsidiary, Sino Water Pte Ltd.
In a stock exchange filing, Puncak Niaga said Sino Water yesterday entered into a framework agreement (FA) with the Lushan County People’s Government to dispose of its entire stake in Luwei Co Ltd to a state-owned enterprise.
The Lushan Government will identify one of its state-owned enterprises to acquire the entire stake in Luwei.
Sino Water holds a 93.81% stake in Luwei, a water treatment and distribution company, while the remaining 6.19% stake is held by Environmental Holding Pte Ltd.
“The execution of the FA for the proposed disposal will allow Sino Water to divest its loss making subsidiary in the PRC and to limit the group’s losses arising from this investment as Puncak intends to exit its business in the PRC,” it said yesterday.
It added that the financial effects of the proposed disposal can only be determined once the terms and conditions for the equity transfer agreement are executed by the vendors and purchasers before August 31, 2016.
Puncak Niaga entered the China market in mid-2008 via Sino Water, which focuses primarily on potential markets there.