Goldman, funds to buy $50 mln China Water bonds

HONG KONG, Jan 26 (Reuters) - A Goldman Sachs-led (GS.N: Quote, Profile, Research, Stock Buzz) team of funds has agreed to buy $50 million of convertible notes in China Water and Drinks Inc (CWDK.OB: Quote, Profile, Research, Stock Buzz), which supplies purified water to the likes of Coca-Cola (CCE.N: Quote, Profile, Research, Stock Buzz) and Taiwan's top food and beverage firm, Uni-President (1216.TW: Quote, Profile, Research, Stock Buzz).

China Water, which sells bottled water in 11 provinces under the brand "Darcunk", said in a statement on Saturday it would sell notes bearing annual interest of 5 percent to Goldman, Liberty Harbor Master Fund and the Pinnacle Fund, among others.

The notes to be sold will be convertible into China Water stock at $4.25 per share. [ID:nPnCNF019a]. The Chinese firm plans to use the proceeds of the deal to bankroll acquisitions.

"There is a tremendous opportunity for us to expand our market penetration as Chinese consumers are increasingly choosing bottled water as their preferred choice of beverage," China Water chief executive Xinghua Chen said in a statement.

Acute shortages and worsening pollution across Asia should buoy demand for clean water for years to come, with China's $14.2 billion water industry a long-term investment destination.

Per-capita water resources in China, the world's fourth-largest economy, stand at 2,200 cu m (77,690 cu ft), less than a third of the global average. (Reporting by Edwin Chan; Editing by Ramthan Hussain)