BGBS & SK E&S will enter into Joint Ventures to scale up natural gas business in the PRC
HONG KONG, July 6, 2020 /PRNewswire/ -- Beijing Gas Blue Sky Holdings Limited ("the Company" or "Beijing Gas Blue Sky", together with its subsidiaries, the "Group", HKSE stock code: 6828) is pleased to announce that, the Group has entered into Share transfer Increase Agreements with a subsidiary of SK E&S, South Korea's largest integrated energy and chemical company, pursuant to which it conditionally agreed to sell 30% equity interest in Ningbo Beilun Bochen Energy Trading Co., Ltd., Huzhou Bochen Natural Gas Co., Ltd. and Zhejiang Boxin Energy Co., Ltd., at a consideration amount of RMB37.5 million, RMB30.0 million and RBM61.5 million, respectively.
SK E&S is a fully integrated global LNG company and its businesses involve all parts of the LNG value chain including upstream gas production, midstream LNG liquefaction, storage and regasification, and downstream power generation and city gas distribution. SK E&S aims to become a global leader in clean energy by continuing its expansion and investments in the LNG and renewables sectors.
SK E&S is a subsidiary of SK Holdings Co., Ltd., the major ultimate holding company of SK Group, Korea's third largest conglomerate. SK Group's businesses cover a diverse range of sectors including the energy, chemical, information and communication technology, and semiconductor sectors.
In 2018, SK E&S has become our investor and subscribed to the group's convertible bonds at the principal amount of HK$180 million. The convertible bonds have been redeemed and the Company has no other convertible bond in issue after the Full Redemption.
Information of the target companies:
1. Ningbo Beilun Bochen Energy Trading Co., Ltd. together with its subsidiary: is principally engaged in sales and distribution of natural gas and other related products, including direct supply of LNG to industrial users and LNG trading.
2. Huzhou Bochen Natural Gas Co., Ltd.: is principally engaged in sales and distribution of natural gas and other related products, including direct supply of LNG to industrial users and LNG trading.
3. Zhejiang Boxin Energy Co., Ltd. together with its subsidiary: is principally engaged in sales and distribution of natural gas and other related products. It has a stable source of gas from CNOOC's Zhejiang Ningbo LNG receiving terminal, and is the main distributor of the receiving terminal, mainly distributing and supplying to major industrial users. Its businesses mainly cover Zhejiang, Fujian, Jiangsu, Anhui and Guangdong provinces in the PRC.
The transactions contemplated under the Share Purchase Agreements are beneficial to the Company and Shareholders of the Group as a whole. The joint ventures between the Group and the Purchaser contemplated under the Joint Ventures Agreements is expected to strengthen the financial positions and business development scale of the Target Companies by sharing the development and relevant operating costs for the operations of the Target Companies, thereby expanding market share and operating capabilities in the natural gas business, reducing the operational risks of the Group and strengthening the competitiveness of the Target Companies. The cooperation also shows that the Group's dominant position in natural gas field in the PRC market, especially in the LNG field, is recognized by multinational energy companies. East China is the core market of China's natural gas consumption. In the future, cooperation between both parties will focus on natural gas business in East China, and then further expand to nationwide level."
About Beijing Gas Blue Sky Holdings Limited
Beijing Gas Blue Sky Holdings Limited ("BGBS", HKSE stock code: 6828) is an integrated natural gas provider and operator focusing on the midstream and downstream development of the natural gas industry chain. Beijing Gas Group Co., Ltd. ("Beijing Gas Group") is the single largest shareholder, with this strength, the Group's major business includes (1) development and operation of city gas projects; (2) direct supply of liquefied natural gas ("LNG") to industrial end users; (3) trading and distribution of compressed natural gas ("CNG") and LNG; and (4) operating CNG and LNG refueling stations for vehicles. The Group aims to become China's leading natural gas integrated operator and will focus on LNG business in the short term.
The Group will proactively expand and lay out its business across the country to fully get involved in the development throughout the whole natural gas industry chain, thus creating the whole industrial chain development advantages for LNG business. Currently, the Group's natural gas projects covered 17 provinces, cities and autonomous regions in the PRC, including Liaoning Province, Jilin Province, Hebei Province, Beijing City, Shandong Province, Shanxi Province, Shaanxi Province, Ningxia Autonomous Region, Shanghai City, Jiangsu Province, Anhui Province, Zhejiang Province, Guizhou Province, Hubei Province, Guangdong Province, Guangxi Province and Hainan Province.