Marubeni to sell Anhui Guozhen stake to province

Published November 9th, 2017

Japanese trading house Marubeni Corporation has agreed to sell its remaining 12.9% stake in private Chinese water project developer Anhui Guozhen Environmental Protection (AGEP) for RMB713 million ($107 million). Its exit provides an entry point for the Anhui provincial government.

Marubeni announced its intent to sell its entire 14.9% stake on 1st September, and divested 2% for RMB109 million ($15.6 million) later that month. Since taking a 30% interest in 2009, it has allowed its stake to be diluted several times, both through AGEP’s 2014 IPO and subsequent share placements.

Marubeni has introduced several Japanese technologies to AGEP, but with limited success: just one JV was formed, with Kubota, and that was dissolved last year.

Nevertheless, AGEP has had a successful 2017, increasing its capacity portfolio by 388,000m3/d and winning several large PPP projects. With greater competition from state-owned giants, however, the ROI for such projects is inevitably being squeezed.