(19 July 2019, Hong Kong) NWS Holdings Limited (“NWS Holdings” or the “Group”; Hong Kong stock code: 659) today announced that its indirect wholly-owned subsidiary Guangdong Xin Chuan Co., Ltd. has won the bid for the concession right over Changliu Expressway in Hunan Province, the Mainland through an online public auction with a total consideration of RMB4,571 million (equivalent to approximately HK$5,194 million). This project is expected to contribute immediate profit and cash flow to the Group after completion
Changliu Expressway connects Changsha and Liuyang in Hunan Province, going eastbound from Changsha City to Jiangxi Province, and going westbound from Liuyang City to the provincial capital city of Hunan Province, Changsha City. With a total length of approximately 65 km, this dual two-lane expressway has an average daily traffic flow of more than 29,000 vehicles in 2018.
Changliu Expressway has commenced operation since October 2013 with concession expiry in October 2043. It will be the project with the longest remaining concession period (around 24 years) within the Group’s road portfolio. The acquisition will contribute to the sustainable growth of the Group’s Roads segment. The concession right includes toll collection right, advertising operation right, facilities operation right, and land use right over certain carpark that is currently idle.
Brian Cheng, Executive Director of NWS Holdings, commented on the acquisition, “We are constantly looking to identify road projects that have growth potential with long concession period and are able to provide immediate profit contribution to the Group, and this acquisition is well in line with these objectives. It also aligns with the Group’s strategy of optimising business through acquiring quality assets that can bring long-term growth, which will enhance the value of the Group and its shareholders as a whole.”
NWS Holdings operates 15 toll road projects in the Mainland as at 30 June 2019. Apart from the seven road projects in the Greater Bay Area, the Group’s portfolio also includes Hubei Suiyuenan Expressway and Hunan Sui-Yue Expressway, of which certain interests were acquired in 2018. Acquisition in Changliu Expressway will strengthen our presence in Hunan and Hubei provinces. It will benefit the Group in consolidating resources and information exchange such as traffic flow pattern.
This will in turn help boost the Group’s efficiency in managing the expressways and expand its development opportunities in the regions.
Brian Cheng further added, “Urbanisation and industrialisation are gradually spreading into inland from coastal developed cities in the Mainland. Located in Central region, Hubei and Hunan are key transport hubs with good growth potential. It is also one of the strategic locations of our road business, and hence, we would like to continue to strengthen our presence in these regions.”
A deposit of RMB800 million has already been placed for acquiring Changliu Expressway and the remaining RMB3,771 million shall be payable by 2 August 2019. The Group intends to fund the consideration through its internal resources and/or bank financing.
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NWS Holdings Limited (“NWS Holdings”, Hong Kong stock code: 659) is the infrastructure and service flagship of New World Development Company Limited (Hong Kong stock code: 17). It has diverse businesses and investments predominantly in Hong Kong and Mainland China, comprising toll roads, environmental management, port and logistics facilities, rail container terminals, commercial aircraft leasing, facilities management, healthcare services, construction and public transport. Please visit www.nws.com.hk for details.
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