A China-based waste-to-energy operator has lodged a preliminary prospectus for a listing on the mainboard of the Singapore Exchange with plans to start trading on July 29.
China Jinjiang Environment plans to issue 92.4 million new shares to the public, which will represent 7.7 per cent of the total of 1.2 billion issued shares in the company after the listing.
According to its draft prospectus lodged last week, China Jinjiang Environment operates 16 waste-to-energy facilities in 12 provinces, autonomous regions and centrally-administered municipalities across China.
The firm, which is controlled by Hangzhou Jinjiang Group, a Chinese private enterprise in the metal and chemical industries, intends to use the initial public offering (IPO) proceeds to repay debt, invest in its existing facilities and acquire waste-to-energy operators Zhuji Bafang and Wenling Green Energy from Jinjiang Group.
The draft prospectus did not state how much the firm intends to raise.
While China Jinjiang Environment does not have a fixed dividend policy, it plans to recommend and distribute dividends of 50 per cent of net profit after tax attributable to shareholders for this year and next year.
Excluding discontinued operations after work ceased at the Jiaxing plant in 2014, the firm posted full-year revenue of 1.59 billion yuan (S$320.3 million) last year, up 25.1 per cent from 2014. Profit from continuing operations was 405.6 million yuan, up 24.5 per cent from 2014.
On-grid tariffs are the firm's largest source of revenue, accounting for 46.3 per cent of total revenue from continuing operations last year.
"Favourable governmental policies have stimulated the rapid growth of the waste-to-energy industry, such as preferential on-grid tariffs, mandatory offtake of electricity generated by waste-to-energy plants, governmental subsidies on waste treatment and favourable value-added tax treatment," the firm said.
Waste-treatment fees are the second-largest source of revenue, accounting for 21.8 per cent of total turnover from continuing operations last year. Such rates are generally determined by the local governments and vary across locations, the firm noted.
China Jinjiang Environment had net current liabilities of 164.1 million yuan as at Dec 31 last year, due to the "significant amount" of trade and other payables incurred to finance its projects as the business grew, the firm said.
China International Capital Corporation (Singapore) is the sole bookrunner and underwriter for the IPO.