China Communication Construction Corporation is looking to buy brownfield projects following last year’s failed attempt to take over a major Canadian builder.
The state-owned infrastructure giant is seeking targets in mature markets such as Europe and North America, with a preference for companies specialising in project design and consulting services, Board Secretary Zhou Changjiang said on the sidelines of a post-earnings briefing in Hong Kong Wednesday (10 April).
“We have always been on the lookout for good assets,” he said, adding that his company is considering acquisitions in Europe, Canada and Brazil.
The Beijing-based company made a now aborted CAD 1.51bn (USD 1.17bn) takeover bid for AECON Group in October 2017 that was blocked the following year by the Canadian government on national security grounds.
Zhou also said that CCCC will fast track implementation of some Belt and Road projects and will look to sign a number of new non-binding deals with different countries in the coming months.
The company’s Hong Kong-based investment offshoot – CCCC International – bought Australian contractor John Holland in 2015. Markets outside China contributed 19%, or about USD 13.9bn of the group’s total revenue last year. CCCC aims to raise the overseas business share to 30% for both revenue and net income by the end of 2020, Zhou said.
East Coast Rail Link
CCCC has put forward a revised plan for a landmark Belt and Road project – the MYR 55bn (USD13.7bn) East Coast Rail Link in Malaysia – which the country’s government has put on hold on concerns over the project’s financial viability.
“We have been in close and active negotiations with the Malaysian side and confident of the project’s execution so far,” said Zhou. The Chinese firm has proposed a new feasibility study that will lower the construction cost and optimise the design, he added.
CCCC in July last year said, it was told to halt all work on the railway project, which was carried out by the Chinese firm under an EPC contract signed in early 2017. The administration of new Malaysian Prime Minister Mahathir Mohamad indicated that the project will be financially viable only if CCCC slashes its pricing.