Recently, through IB Wealth, a separate subsidiary, IB Fund, a shareholding subsidiary of IB, took operation revenue of sewage treatment projects as basic assets, use asset securitization tools to raise RMB 488 million for Anhui Guozhen Environmental Protection&Energy Conserving Technology Co., Ltd. (hereinafter called “Guozhen Environmental Protection”), a listed company on GEM, realizing a “perfect connection” between financial capital and green industry.
Headquartered in Hefei city of Anhui province, Guozhen Environmental Protection is one of the earliest professional companies that offers “one-stop six-dimensional services” comprehensive solutions during the market-oriented development of China’s sewage treatment industry, and was listed on A stock GEM in August 2014.
Cui Xianfu, CFO of Guozhen Environmental Protection, introduced that this fund raised has a time limit of 5 years, of which priority fund was RMB 440 million and secondary fund was RMB 48 million. The company planned to put all of it in production, operation, quality improvement and transformation of sewage treatment projects, in optimizing and updating equipment and techniques, in improving emergency sewage treatment ability, in ensuring stable and qualified water quality, so as to ameliorate local ecology.
The head of Investment Bank Department of IB Wealth said that Guozhen Environmental Protection runs over 90 sewage treatment plants in 11 provinces nationwide with sewage treatment of 3 million tons per day and the number and scale of projects being one of China’s best. Its sewage treatment projects meet requirements of Catalogue of Green Securities-backed Projects released by Green Finance Specialized Committee of China Finance Society, and are certified by IB green finance.
Therefore, through structure design of sharing rights and interests, IB Wealth took six sewage treatment projects of Guozhen Environmental Protection in Xuzhou city and other places as a whole, rendered charges for sewage treatment operation in the next five years as basic assets, got market approval through cash flow over coverage and pledge of charge right, issued asset-backed securities to raise RMB 488 million, solving problems of single sewage treatment plant, namely, small project scale, poor market approval and high financing cost.
Market analysts reckon that “Xingqian” series provident fund asset securitization launched by IB Wealth lead the industry, and that the successful launch of Guozhen environmental protection sewage treatment fee ABS laid a solid foundation for the company to develop green finance via diversified financial instruments.
It is reported that IB Fund has actively involved in new energy vehicles industrial chain via IB Wealth, and has participated in the private placement project of J&R Optimum Energy (a company on GEM) merging Optimum Nano, private placement project of Cangzhou Mingzhu Plastic Co., Ltd. (a listed company on SME board) and private placement project of Shenzhen Greatland Electrics Inc.(a listed company on new OTC market), totaling RMB 293 million, to advance new energy vehicle industry; it also participated in subscribing industrial fund share oriented toward green and environmental-friendly industry by establishing PPP fund, and in green financial business that provides entrusted loans for green and environmental-friendly enterprises and environmental improvement projects. Last year it completed 6 projects with funds of over RMB 4.7 billion.
IB is China's first equator bank and the earliest stock-holding commercial bank to develop green finance, while IB Fund is an essential part of IB’s layout in securities fund industry. The successful launch of Guozhen environmental protection sewage treatment fee ABS demonstrated that IB took advantage of comprehensive operation and cross-market diversified financing services, made green financing business stronger, and gave impetus to green and environmental-friendly industry.