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Chinese wastewater treatment firm raises $171m from IPO

Over half of the offering was backed by state-owned investment vehicles and domestic strategic investors.

Kunming Dianchi Water Treatment Company, a municipal wastewater treatment services provider in Yunnan Province, China, has raised HKD1.3 billion ($171 million; €161 million) from last week’s initial public offering on the Hong Kong Stock Exchange.

The IPO was supported by four cornerstone investors, including local government investment firm Kunming Industrial Development, the Yunnan Provincial Investment Holdings Group, strategic player Beijing Enterprises Water Group and water-focused investor China Water Environment Group.

The cornerstone investments accounted for approximately 55.6 percent of the H-Share global offering, or around 18.4 percent of the company’s total issued share capital following completion of the IPO. Proceeds from the offering will be used to finance its BOT/BOO water treatment and running water supply projects, expand its operations through the purchase of future projects, repay current bank debts and fund working capital.

The company, currently the largest player in the province, was founded in 2010 with funding from five state-owned Kunming enterprises. It has a total of 34 plants under concession, including 29 plants in operation, two under construction and three under development. Two of the projects under development are in Laos.

Kunming Dianchi Water Treatment Company accounted for 34 percent of the designated wastewater treatment capacity and 45.1 percent of actual volume of wastewater treated in the province, said Frost & Sullivan, a third-party consultancy and research firm.