HONG KONG, CHINA - Media OutReach - 9 June 2017 - Beijing Gas Blue Sky Holdings Limited ("the Company" or "Beijing Gas Blue Sky", together with its subsidiaries, the "Group", HKSE: 6828) is pleased to announce that, Goldlink Capital Limited, a direct wholly-owned subsidiary of the Company, conditionally agrees to purchase 100% of the issued share capital of Top Grand Global Limited ("Top Grand"), which indirectly holds 98% equity interest of Shenzhen Yuhai Energy Company Limited ("Yuhai"), at the Consideration of RMB350 million (equivalent to approximately HK$400 million), subject to adjustment.
Yuhai holds 51% of Chongqing Saiguangbo Technology Company Limited ("Saiguangbo"), and Saiguangbo holds 100% of Shanxi Minsheng Natural Gas Co., Ltd. ("Shanxi Minsheng") and Yongji Minsheng Natural Gas Co., Ltd. ("Yongji Minsheng") respectively.
Shanxi Minsheng, is principally engaged in the (i) supply of piped gas to residential households, public utility, commercial and industrial users; and (ii) operation of 5 compressed natural gas (''CNG'') refuelling stations for vehicles in Yuncheng City, Shanxi Province. Currently, it completed the connection for approximately 140,000 residential households and approximately 352 public utility, commercial and industrial users. For the year ended 31 December 2016, the total gas sales volume of Shanxi Minsheng amounted to approximately 69 million cubic meters.
Shanxi Minsheng entered into a number of operation rights agreements for terms of 20 years to 25 years with the local government of Yuncheng City in Shanxi Province, for the supply of natural gas via gas pipelines within the Urban Planning Area in Yuncheng City and the new development areas, such as Yanhu, Konggang and Yuncheng Economic Development Zone. Of which Konggang will be the key growth area for piped gas consumption.
Yongji Minsheng is principally engaged in the (i) supply of piped gas to residential households, public utility, commercial and industrial users; and (ii) operation of 2 CNG refuelling stations for vehicles in Yongji City, Shanxi Province. Currently, it completed the connection for approximately 19,000 residential households and approximately 85 public utility, commercial and industrial users. During the year ended 31 December 2016, the total gas sales volume of Yongji Minsheng amounted to approximately 17 million cubic meters.
Yongji Minsheng has entered into a franchise operation agreement for terms of 30 years with the local government of Yongji City, to invest in and operate the city pipeline system to provide and distribute piped natural gas in Yongji City, Shanxi Province.
It is expected that there will be further new connection to residential households by Shanxi Minsheng and Yongji Minsheng, in view of (i) the new real estate projects to be completed; and (ii) the conversion to piped gas by existing residential areas. They are expected to complete gas connections for approximately 90,000 and 30,000 new residential households in total in coming three years and coming few years respectively.
The unaudited net profit of Shanxi Minsheng and Yongji Minsheng adjusted by the management fee, of approximately RMB13.2 million and RMB4.2 million, respectively, for the three months ended 31 March 2017. The Vendor guarantees and undertakes to the Purchaser that the audited net profit of the Target Group net of any extraordinary items for the period of one year from date of Completion shall not be less than RMB50 million (equivalent to approximately HK$56.18 million).
Mr. Tommy Cheng, Co-Chairman and Executive Director of the Group said that "The Acquisition will enable the Group to expand its natural gas operations and distribution in the PRC, as well as increase our market share. In addition, it will enhance our shareholders' value and diversify our income stream, by increasing the Group's revenue source; enlarging the Group's geographical footprint to Shanxi Province of the PRC, and capturing the incremental gas demand driven by the nationwide coal-to-gas conversion plan given Shanxi is a traditional heavy industry dominated province."
About Beijing Gas Blue Sky Holdings Limited
Beijing Gas Blue Sky Holdings Limited ("Beijing Gas Blue Sky", HKSE stock code: 6828) is an integrated natural gas provider, distributor and operator, with an emphasis on the midstream and downstream natural gas development. Our natural gas business includes: (i) construction and operation of compressed natural gas ("CNG") and liquefied natural gas ("LNG") refueling stations for vehicles; (ii) construction of natural gas pipelines and operation of city gas projects by providing piped gas; (iii) direct supply of LNG to end-users; and (iv) trading and distribution of CNG and LNG.
The Group has adapted to the "One Belt One Road" policy, and focus on operating and investing natural gas business. The Group is actively expanding its business development and distribution, as well as continues to gradually expanding the scale of operations. Currently, the Group has business presence in several provinces in Northeast China, East China, Central South China and Southwest China, including Liaoning Province, Shandong Province, Anhui Province, Zhejiang Province, Hubei Province, Guizhou Province, Sichuan Province and Hainan Province, etc. In the future, The Group is committed to its vision "develop clean energy, enhance customer value, create a beautiful blue sky". It will continue to actively investing and developing natural gas business, as well as participating in the development of natural gas industry value chain.