FFWD.L Regulatory News (FFWD)

21 Sep 2006 10:05

London Asia Chinese Private Equity21 September 2006 21 September 2006 London Asia Chinese Private Equity Fund Limited("LACPEF" or "the Fund") Two New Investments LACPEF, the China focused investment fund, announces that it has made two newinvestments for a total of £14.2 million, making seven investments since theFund closed on 15 March, with over £23 million of funds committed. Canmake Business Ltd Founded in 2001, Canmake Business Ltd ("Canmake") is a manufacturer of can-lids,pull-tab ends, caps, closures and other metal packaging products serving thefast growing Chinese beverage and food industries. Canmake sells over 150million lids a month. Canmake generated profits of £4.2 million for the year ended 30 June 2006,showing growth of over 60%. The Fund has invested £4.9 million for a 20% stake.Simon Littlewood has joined the Board of Canmake. Commenting on the investment Reynold Wong, Chief Executive of Canmake said: "Thenew investment strengthens our capital base, enabling us to scale up our salesvolumes and to expand the range of products we provide to our customers. We lookforward to working with London Asia to develop our business and position theCompany for a stock market listing." Simon Littlewood, Director of LACPEF, said: "Canmake has an established positionin a fast growing market, with opportunities to expand into related products asthe market continues to develop in China on the back of rising prosperity andshifts in consumer tastes." Asia Water Technology The Fund has acquired a 22% stake in Singapore listed Asia Water Technology ("AWT" or "the Company"), for a total consideration of £9.3 million in cash. AWT was founded in November 2002 and listed on Singapore's SESDAQ Stock Marketin March 2005 (Code: SI5GB). It has a current market capitalisation ofapproximately £48 million. For the year ended 31 December 2005, AWT reported profit after tax of £2.6million on sales of £26.2 million. For the half-year period ended 30 June 2006,the Company saw profits attributable to shareholders increase by 34% to £1.4million. The net assets as at 30 June 2006 were £16.7 million. Following the acquisition of the stake, which was acquired from one shareholder,the Fund is now the largest shareholder in AWT. Simon Littlewood, ExecutiveDirector of the Fund, has been appointed to the Company's board as Chairman ofthe Investment Committee, responsible for new investments and capitalexpenditure, as well as financing. Victor Ng, Fund Executive Director, is anexisting director of AWT and Chairman of the Remuneration Committee. AWT is a specialist water treatment company, offering total engineeringsolutions for both water purification and waste water treatments systems. Ithas also invested in Build-Operate-Transfer ("BOT") projects for water supplyand waste water treatment plants, working primarily with clients in the powergeneration and municipal water supplying and waste water treatment industries inChina. In late August 2006, Zhou Shengxian, head of the State Environmental ProtectionAdministration, announced that China is to launch a giant water pollutioncontrol project to address the fact that per capita water resources in China areonly one third of the world's average. This will be the country's largestenvironment related scientific research project in terms of investment. Chinahas 21% of the world's population, but only 7% of the world's water supply, andthis summer has seen the worst droughts in 50 years. Other key factors driving AWT's growth include: • statistics from the Chinese Government show that among 660 citiesnationwide, 364 cities are still threatened by the supply of adequate cleanwater and 297 cities have not yet established qualified waste water treatmentfacilities; • according to China's tenth 'Five Year Plan', by 2010 additional watersupplying capacity of 40 billion cubic meters will be built; • The State Council has planned that at least 60% of Chinese citiesshould have waste water treatment facilities ready by 2010, which means morethan 1,500 municipal waste water treatment plants will be built in the next fiveyears; • ninety per cent of waterways flowing through China's cities and 75% ofthe country's lakes are polluted; and • more than 300 million of China's rural population do not have accessto clean potable water. Mr Hanguang Huang, Chief Executive of AWT, said: "AWT is a small companyoperating in a huge market. We have many more projects than funds available, andwe look forward to working with London Asia and the funds it manages to enableus to expand our business rapidly and take advantage of the huge number ofopportunities in our sector, where we have recognised expertise. We hope therelationship will not only bring us additional sources of finance, but alsoaccess to the latest technology in the sector from around the world throughLondon Asia's international network." Simon Littlewood, Director of LACPEF, said: "This is an excellent opportunity toinvest in a fast growing business in a sector with massive long term growthpotential, as China seeks to address major issues with the supply and treatmentof its water and waste. The Chinese Government has recognised the need toaddress the efficient treatment of waste water, to curb its water shortages, andto supply its growing cities with clean, safe water. The Fund has theopportunity to get in at the beginning of the Company's anticipated rapidgrowth." For further information please visit www.londonasiafunds.com or contact: John West/Matt Ridsdale Stephen Lucas Hugh FieldTavistock Communications London Asia Capital plc Collins Stewart LimitedTel: 020 7920 3150 Tel: 020 7355 7928 Tel: 020 7523 8000 About Canmake Business Ltd Founded in 2001, Canmake currently has monthly sales averaging over 150 millionlids, with a total of nearly 2 billion lids and caps delivered to its customersin 2005. The canned food and beverage market in China is seeing considerable growth as aresult of rising prosperity and a shift in consumption patterns. Only 11billion beverage cans are consumed annually by a population of over 1.3 billionin China, with an average consumption of 8 cans per capita per year, against 400cans per capita in the US, 140 in Japan, and 67 in South Korea. The annualconsumption of canned food in China is only 1.5kg per head - the annualconsumption of the USA is 90kg per capita, Europe is 50kg, Japan is 23kg and theworld average is 8kg per capita. About Asia Water Asia Water is engaged in: • providing total engineering solutions for water purification, watersupply and waste water treatment projects as a general EPC contractor. Sinceincorporation, Asia Water has signed over 200 water purification contracts forpower plants and 5 municipal water supply and treatment contracts, with totalcontract value exceeding RMB 2 billion. • managing and operating municipal water supply and waste watertreatment plants on a "BOT" basis. Currently, Asia Water is operating twomunicipal water supply plants and three waste water treatment plants. For additional information, see www.asiawatertech.com This information is provided by RNS The company news service from the London Stock Exchange