China Gas in talks to buy 2 billion yuan of projects from parent
Beijing Enterprises looks to sell 2b yuan worth of projects to the city gas distributor as part of its ambition to break out from the capital
China Gas, the mainland's largest city gas distributor, is in talks to buy a 2 billion yuan (HK$2.54 billion) portfolio from its biggest shareholder, Beijing Enterprises Group, according to sources with the companies.
The potential asset injection, if it materialises, means a significant step forward in Beijing Enterprises' ambition to break out from its principal market - Beijing - to the rest of the country.
The sources said it was also part of the group's asset reorganisation, which aimed to bundle its non-Beijing city gas portfolio with that of China Gas while leaving Beijing Gas - a wholly owned subsidiary of its Hong Kong-listed infrastructure flagship, Beijing Enterprises Holdings - to focus on the capital, where it is the sole gas supplier.
Earlier this month, the group transferred its 21.96 per cent stake in China Gas to BEH for HK$7.39 billion.
BEH vice-chairman Zhou Si, also chairman of the board and executive director of China Gas, said on Tuesday the two companies were discussing "co-operation" but declined to comment further.
The China Gas management is looking into the valuation of Beijing Enterprises Group’s portfolio, which is fairly sizeable