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The Board of Directors Salcon Berhad is pleased to announce that on 7 and 8 June, 2004, the company has entered into two Framework Agreements for water projects in Yunnan Province, Peoples Republic of China.
In the Agreement dated 7 June, 2004 with the Cheng Gong New Township Management Committee, Kunming City, Salcon Berhad will undertake the construction of a water treatment plant with an eventual capacity of 300 million litres per day (MLD) in Cheng Gong New Township on a Build-Operate-Transfer basis. The investment of the project is estimated at RMB 300 million and will be implemented in phases.
In the Agreement dated 8 June, 2004 with the Economic Development Bureau of Cheng Gong New Township Management Committee, Salcon Berhad will jointly invest, construct and manage the existing water supply system in Cheng Gong County via a newly formed Joint Venture Company (JV Co.). The JV Co. will be responsible in supplying potable water to the existing Cheng Gong County and will involve the construction of a water treatment plant with a capacity of 20 MLD and expandable to 60 MLD.
The registered share capital of this JV CO will be determined subsequently based on the investment requirement of the project and the net asset value of the existing water supply system which is to be assumed by the JV Co.
The shareholdings of the respective parties will be determined by both parties upon the completion of the assets evaluation exercise of the existing Cheng Gong County water supply system.
The Framework Agreements will be used as a basis for further discussion and negotiation and the final investment proposal will be based on the actual agreement signed by both parties.
The exercise will be funded through a combination of internally generated funds and borrowings.
The above investment and projects will not have a material impact on the earnings, net tangible assets and financial performance of Salcon Berhad for this financial year. However it is expected to contribute positively in future years.
None of the directors and / or substantial shareholders of Salcon Berhad and / or persons connected to them have any interest, direct or indirect in the above Agreements.