Shanghai Industrial Holdings has committed to a 2.86 billion yuan Zhejiang toll-road project in an effort to fill an earnings gap left by the sale of the company's infrastructure portfolio.
The infrastructure-to-consumer goods conglomerate said yesterday that it had signed an agreement to take a 30 per cent interest in the project at a cost of 283 million yuan.
At stake is the Jinhua section of the 185km Yongjin Expressway, which runs 69.7km from Ningbo in the east of the Yangtze delta to Jinhua in the southwest.
A company spokesman said the project was expected to generate an internal rate of return of 11 per cent over an operating period of 25 years.
The investment underscores the red-chip company's efforts to rebuild its infrastructure portfolio after disposing of its Shanghai toll roads last year in response to a new government policy banning state-guaranteed returns on infrastructure.
Shanghai Industrial has also diversified into water treatment and supply.