(October 15, 2009 - Hong Kong) China Water Affairs Group Limited (“China Water Affairs” or the “Company”, together with its subsidiaries collectively referred to as the “Group”; stock code: 00855.HK), one of the largest integrated water services operators in China, announced that the Company proposed to spin off its non-wholly owned subsidiary Xinyu Xiannuhu Xincheng Kaifa Company Limited for separate listing on the Main Board of the Stock Exchange or other stock exchange.
China Water Affairs entered into a framework agreement with other shareholders of Xinyu Xiannuhu Xincheng Kaifa Company Limited (the “Target Company”) on October 14, 2009. Pursuant to it, the Company is authorized to engage professional advisers and to coordinate on the preparation work in relation to the proposed spin-off. Upon a preliminary assessment of the business affairs of the Target Company, it is likely to meet the basic qualifications for listing on the main board of the Stock Exchange. However, the proposed spin-off is at a very early stage and it may or may not proceed.
China Water Affairs holds a 58% equity interest in the Target Company, which is principally engaged in tourism, property development and infrastructure construction in Xiannuhu, Xinyu, Jiangxi Province. Currently it possesses rights to use approximately 3.3 million m2 of land in the Xiannuhu area. One of the major tourist attractions in Xiannuhu consists of a lake district of approximately 50 km2 comprising of over 100 sporadic islands.