Sapphire Corp to divest 43.9% stake in Ranken Railway for 280m yuan

MAINBOARD-LISTED infrastructure design and construction group Sapphire Corp on Tuesday said it has inked an agreement to sell a 43.87 per cent stake in Ranken Railway for some 280 million yuan in cash.

The buyer is Shandong Hi-Speed Road & Bridge Investment Management Co, which has also agreed to subscribe for an additional 71.1 million shares in Ranken Railway for 75.7 million yuan, amounting to about 10.6 per cent of the unit's enlarged share capital, following the proposed transaction. Upon completion of the deal, Sapphire Corp will retain a 48.82 per cent effective interest in Ranken Railway. Ranken Railway will also become an indirect and partial state-owned enterprise in China and be able to tender for key infrastructure projects in the country, a process which requires contractors or vendors to be state-owned, Sapphire Corp said.

"Given its status as an indirect SOE following the proposed transaction, Ranken Railway would be placed in a more favourable position to secure project contracts in the People's Republic of China , and may be able to enjoy lower interest rates on external borrowings from financial institutions," Sapphire Corp said.

Wang Heng, chief executive of Sapphire Corp, said:"And by retaining a meaningful stake in Ranken Railway, we have the opportunity toparticipate in the future growth of Ranken Railway as an indirect and partial SOE in the PRC."

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