Sapphire’s subsidiary and consortium partners wins $277 mil PPP project in Chengdu
SINGAPORE (Nov 19): Sapphire Corporation’s 97.6% owned subsidiary, Ranken Railway Construction Group Co, and consortium partners have secured a PPP project in Chengdu, Sichuan Province, China.
The cost of this PPP project is estimated at RMB 1.4 billion ($277 million), where 20% of the cost will be funded by consortium partners who will together form a project company and the remaining 80% funded by project financing from financial institutions.
The PPP project will focus on a broader urban renewal effort to create a greener living environment in Wuhou District and involves the design, build, finance and management of ecological restoration, flood control measures and building infrastructures along an 18.68km embankment along Jiang An River, one of the key waterways in Chengdu.
The project is expected to be 15 years, which comprises two years of construction as well as the operational and management rights of the building infrastructures along the river bank for the remaining 13 years.
Revenue from this PPP project will be derived from government subsidies and operational and management rights of the building infrastructures along the river bank for the 13-year period, whereby the consortium partners will develop new recreational amenities, F&B retail and lifestyle concepts to generate long-term recurring revenue.
The registered share capital of the project company is RMB 50 million and the initial equity investment is set at RMB 30 million with the balance of equity injection to be disbursed into project company in tranches progressively over the course of construction of the PPP project.
As part of the consortium, Ranken will invest 25% equity interest in the project company with an initial cash investment of RMB 7.5 million, which will be funded through internal resources.
Wang Heng, Chief Executive Officer of Sapphire, says, “This massive PPP project comes on the heel of our recent water treatment facility improvement project announced in September. While the group’s railway infrastructure construction business continues to grow steadily, our water and environment management business has gained significant momentum in recent years.”
Year to date, shares in Sapphire are down by half to 14 cents.
See also: HNA-linked acquirer terminates purchase of stake in Sapphire Corp
