SHANGHAI ? China's state-owned refiner China Petroleum & Chemical Corp. is pushing ahead with acquisitions of key natural gas assets, despite the dim economic outlook and weak profits in the sector.
The company, better known as Sinopec, and Chinese gas distributor ENN Energy Holdings said Tuesday that they are offering $2 billion in cash for gas distributor China Gas Holdings.
That followed news that Sinopec was increasing its stake in coalbed methane producer Australia Pacific LNG Pty. Sinopec said it hopes to buy an additional 10 percent of APLNG, after agreeing in April to pay $1.5 billion for a 15 percent stake in the ConocoPhillips Co and Origin Energy Ltd. joint venture.
Sinopec raised its planned purchases of LNG from the venture to 7.6 million tons a year, until 2035.
Such purchases highlight sustained strong demand in Asia, especially China, for access to strategically important energy resources, Fitch Ratings said in a report released Wednesday.
Is said such takeovers and acquisitions would remain strong in 2012, especially for state-run oil and gas companies, even if the investments "are not expected to provide immediate returns."
"Chinese oil companies ? with overseas reserves currently between 6 percent to 20 percent of total proved reserves ? will continue to be the most active purchasers, and have shown an appetite for larger deal sizes," it said.
Sinopec and ENN are offering HK$3.50 per share to buy all outstanding shares in China Gas, which supplies piped natural gas and liquefied petroleum gas in 20 provinces in the Chinese mainland and builds and runs natural gas filling stations.
The offer of 15.3 billion Hong Kong dollars ($2 billion) is a 25 percent premium over China Gas's last closing share price before the offer was made. Sinopec will finance 45 percent and ENN 55 percent of the costs, the companies said.
China Gas said in a notice to the Hong Kong Stock Exchange that it had held no discussions with Sinopec and ENN before the offer was made.
The takeover would be subject to government approvals.
Sinopec and ENN said they planned to further develop the gas distribution network in China in collaboration with China Gas and do not intend to change the "continued employment" of its workers.
The takeover fits Sinopec's long-term strategy of integrating its operations from production to distribution to end users, the refiner said.
ENN Energy provides gas connections, sales of piped gas, construction and operation of vehicle gas refuelling stations, distribution of bottled LNG and sales of gas appliances in China. Joining with China Gas would help ENN streamline and optimize the two suppliers' networks and management and give it access to distribution networks in Inner Mongolia and Shaanxi as a result of the takeover.
However, Fitch said it had placed ENN on rating watch "negative" due to the plan, citing concern over a potential increase in ENN's debt level.
While ENN will add 148 city gas projects to its own 100 as a result of the takeover, the acquisition will provide limited profits in the short to medium-term, it said.
adobe air 2005yu55 advanced search personhood amendment haynesworth haynesworth ohio issue 2
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.