Hong Kong’s Sino Energy International signed a deal to acquire an investment firm through which it will own a 16 per cent interest in Fujian Xinjie Natural Gas Co., as it looks to expand its energy business, Sino said.
Under the agreement, Sino Energy has signed an initial agreement to acquiring 100 per cent equity interest in Wealthy Fortress for HK$300 million, to be paid in cash, Sino said in a statement.
Upon transaction completion, Wealthy Fortress will become an indirect wholly-owned subsidiary of the Sino Group and Fujian Xinjie will be 16 per cent indirectly owned by Sino Energy.
Fujian Xinjie, which deals in natural gas and liquefied petroleum gas storage, transportation and sale, currently operates nine gas stations and has signed a strategic cooperation agreement with a PetroChina branch company to help set up 100 gas stations. It will handle sales and transportation of pipeline gas in Fujian targeting 1.3 billion cubic metres of gas in 2017. As the sole natural gas distributor of Kunlun Energy in Fujian Province, Fujian Xinjie will be responsible for the sales of pipeline gas from West line No. 3.
The gas firm posted a 410 per cent growth in net profit to RMB 6.3 million in 2015 and expects a significant increase in net profit in 2017. It is majority owned by a subsidiary of Kunlun Energy Company (58 per cent) while Fujian Deqing Investment Co. (26 per cent) and Wealthy Fortress own the rest.
The acquisition also gives Sino Group the opportunity to work with Kunlun Energy Company Limited, a subsidiary of PetroChina Company and a leading gas industry player in China, to expand its energy-related business.
“Building on the ties with industry leader Kunlun Energy, we will be able to provide shareholders and investors with investment opportunities that promise strong growth potential and, for the Group, greater and sustainable financial returns in the long run," Jianbao said.