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HWT
aims to be a leading investor of water-related infrastructure
assets in the PRC and other high growth markets globally
and to provide Unitholders with long-term, regular and
predictable distributions from its portfolio of water-related
infrastructure assets. To achieve this, the Trustee-Manager
will focus on the following strategies:
| Strategically
expand the size of HWT's portfolio of water-related
infrastructure assets
The
Trustee-Manager will actively expand and diversify
the portfolio of HWT through acquisitions of water-related
infrastructure assets in the PRC, India, the MENA
region and other high-growth markets globally
that it believes will be yield-accretive. The
Trustee-Manager will expand the size of HWT's
assets through selective yield-accretive acquisitions
from the Sponsor Group (such as the water-related
infrastructure assets in the PRC under the ROFOAR)
and from other third party owners of water-related
infrastructure assets.
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| Maintain
a portfolio of high quality assets
HWT's
Trustee-Manager will maintain a well-balanced
and diversified portfolio by investing only in
water-related infrastructure assets which meet
the investment criteria. It will also consider
opportunities to acquire assets at attractive
entry prices, which can be strengthened through
operational and management improvements and financial
restructuring (e.g. recapitalisations, acquisitions
and divestitures). In particular, the asset or
project should:
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Be
involved primarily in the treatment, clarification,
purification and/or distribution of raw water,
seawater, wastewater, and/or recycled water
for industrial, commercial, municipal, agricultural
and/or residential users |
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Be
yield-accretive to HWT |
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Provide
long-term, regular and predictable cash flow.
In line with this criteria, projects which
are not expected to commence commercial operations
within one year after acquisition, shall comprise
not more than 20 per cent of the asset value
of HWT immediately before the relevant acquisition |
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Have
an acceptable level of off-take risk (taking
into consideration the creditworthiness and
reputation of the off-taker) |
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Possess
sound market fundamentals in terms of water
supply-and-demand balance |
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| Maintain
prudent capital structure
The
Trustee-Manager's objective in relation to capital
management is to maintain a prudent financial
leverage with a debt to asset (excluding goodwill)
ratio of no greater than 60 per cent, although
there may be deviations from this in the short-term
arising from timing differences in equity and
debt capital raising for new acquisitions.
The
Trustee-Manager aims to fund the growth of HWT
through a combination of diversified sources of
debt funding and equity, with the objective of
minimising the overall cost of capital of HWT.
The Trustee-Manager believes that this would enable
HWT to maintain its competitive position in the
industry, to improve yields, and achieve long-term
stable cash distributions for its Unitholders.
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