Taizhou Water (HKG:1542) said Thursday it plans to launch a so-called quasi-REIT backed by water supply plants and pipeline networks owned by Binhai Water.

The company's board proposed launching the quasi-REIT on the Shenzhen Stock Exchange, with a planned issuance size of up to 3.20 billion yuan.

Prior to the listing, the firm said it would buy the remaining 49% equity interest in Binhai Water from Taizhou City Water for about 147.5 million yuan and then fully transfer the ownerhip to the quasi-REIT.

Given that Taizhou City Water is an 82%-owned subsidiary of the company, Taizhou Water said it would effectively be acquiring 8.82% of Binhai Water for 26.5 million yuan.

The firm will also subscribe to up to 40% of the quasi-REIT for 1.28 billion yuan, with the remaining 60% offered to external investors.

The 3.20 billion yuan to be raised by the quasi-REIT will be used mainly to repay Binhai Water's existing debt and support working capital.