|
|
|
|
|
|
| To Develop Energy Saving Solution for Central Air-conditioning System in China in Full Swing |
HONG KONG, May 28, 2014 - (ACN Newswire) - The Hong Kong Building and Loan Agency Limited ("HK Building & Loan" or the "Company")(HKSE:145) announces that the Company intends to place up to 3.97 billion existing shares in Tranches to not less than six Placees at the placing price of HK$0.8 per share (after a discount of approximately 3.6% to the closing price of HK$0.83 before trading halt), representing 62.28% and 38.38% of the existing and enlarged share capital, respectively. The maximum gross proceeds from the Placing will be approximately HK$318 million. The maximum net proceeds is estimated to be approximately HK$299 million.
HK Building & Loan intends to apply the net proceeds of HK$33.1 million for settling the cash portion of the consideration of the Acquisition, and the remaining balance of approximately HK$266 million for settling other fees and expenses in connection with the Acquisition as well as general working capital of Weldtech Technology Co. Limited ("Weldtech") and assuming and upon completion of the Acquisition, and other fees and expenses in connection with the Acquisition.
On 31 October 2013, HK Building & Loan entered into an agreement for the acquisition of a full stake in an energy saving solution provider for central air-conditioning system in China, namely Weldtech for HK$2,476 million. Upon exercise of the financial instruments, shareholders of Weldtech will become the major shareholders of the HK Building & Loan. CITIC International Assets Management will also be the largest single shareholder of the Company and China Energy Conservation and Environmental Protection Group becomes one of the shareholders.
Weldtech mainly offers its energy saving solution services by the mode of energy management contract ("EMC"). Weldtech bears setup and maintenance costs for its customers under the EMC model, but shares the customers' energy cost savings at a pre-determined percentage during contract period.
The spokesperson of HK Building & Loan, said: "We are thrilled to have the chance to acquire Weldtech. Weldtech is a leading service provider in energy saving solutions, demonstrating distinct competiveness including patented technology of Ultra Performance Plant Controller (UPPC System), strong R&D capabilities, solid industry knowledge and positive business growth potential. The energy management industry is expected to grow rapidly, benefited from the various policies promulgated by PRC government to reduce carbon emission and the incentive provided for using environmental friendly products. We firmly believe that the acquisition will bring our shareholders continuous returns. The Group has been proactively seeking potential investment opportunities that could enhance its value to the Shareholders. Due to the increasing environmental awareness in China, the Group can diversify its business portfolio and broaden its source of income to ensure a better future prospect."
Leading Energy Saving Solution Provider in China
Weldtech is a professional service provider engaged in provision of energy saving solutions for central air-conditioning chiller plant system in industrial and commercial buildings. With the intellectual property right of UPPC system, the company has maintained its leading market position by providing effective energy saving technologies and solutions principally through energy management contracts (EMC) for large commercial, office, cultural and recreational and public buildings.
Innovative and Unique Patented UPPC Technology
Weldtech has independently researched and developed the UPPC system comprising exclusive hardware and five-patent based programmes, which is designed to maintain energy consumption of chiller plants at the minimum level. Energy saving rate can generally reach 25-50%. The annual energy savings average RMB1.65 million for industrial buildings, and RMB35 thousand for offices, hotels and shopping malls. UPPC comprehensive solution exceeds in optimizing the energy use of building chillers over traditional energy saving systems.
Unique Business Model Accepted by Large Consumers
Weldtech provides a flexible business model. Customers can purchase UPPC system outright or through EMC based on their own needs. Under EMC, Weldtech initially pays upfront investment for clients and can get back its investment and some profits through sharing the energy savings with its clients based on an agreed ratio during contract terms, which is generally determined between 5 to 10 years. Revenue from system update and maintenance also can be generated upon the expiry of contracts. This unique and win-win business model is recognized large clients, so that stable income can be ensured.
Strong Execution Capabilities
Weldtech's software engineers uses the UPPC(R) Designer, a computer aided design software, in system design and programing. The software greatly enhances efficiency by allowing engineer to shorten the design and programing cycle of a project to approximately one week. For an energy-saving project, construction and installation works are outsourced to professional contractors, and Weldtech's team will be in charge of supervising and managing the work of the contractor. Each project team consists of one project manager and one project engineer and each team is capable of overseeing five projects at a time. UPPC's high level of automation significantly reduces after-sales maintenance requirement. An operating project requires only one engineer to perform a 1-2 day sensor checking once a year usually. With strong execution capabilities, the current engineer and management team is capable of completing over 120 projects a year.
Support from Strategic Shareholders and Business Partners
Weldtech has entered into strategic partnership agreements with its shareholders including CITIC Group and CECEP (both are state-owned enterprises) and other leading property management groups to provide energy saving solutions for the buildings owned or managed by these partners and promote its energy saving services through the networking on a large scale basis. This helps Weldtech to secure potential business contracts to further boost profitability.
Experienced Technical Team and Continuous R&D capabilities
Weldtech has a strong R&D team comprising best talents, supported by well-known universities and research institutes in China and other regions. With the most advanced energy saving technologies and products through continuous exploration, Weldtech enjoys its distinct technical competitiveness and can provide the best system control design, software and hardware to its clients.
A Rapid Growing Market With Huge Potential
This is a great opportunity for the Group to tap into the fast growing energy saving industry in China. Energy-savings is listed as one of the seven strategic emerging industries in China under the 12th Five-Year Plan. The energy saving market is expected to further grow, driven by various supportive policies promulgated by PRC government and the incentive and tax-exemption scheme provided for energy saving companies to encourage reduction of energy consumption and carbon emission. According to Frost and Sullivan, the independent third party, the market demand for EMC of chiller plants in 2014 will reach RMB 672 billion, and its total transaction amount in 2009 was only RMB 0.9 billion, representing 0.24% of the total demand. The market has a huge growth potential. It is expected that the market demand will increase at the annual rate of double digits, and will reach the record high of RMB1,298 billion.
Contact:
Angel Yeung
Jovian Communications
Tel: +852 2581 0168
Fax: +852 2854 2012
Email: angel@joviancomm.com
Topic: Stock--buying or selling
Source: The Hong Kong Building and Loan Agency Limited
Sectors: Daily Finance
https://www.acnnewswire.com
From the Asia Corporate News Network
Copyright © 2024 ACN Newswire. All rights reserved. A division of Asia Corporate News Network.
|
|
|
|
|
|
|
|
