Red chip Tianjin Development Holdings, the listed arm of the Tianjin municipality, has announced it will spend $82 million to buy a 40 per cent stake in a gas-fuel supply business from its mainland parent.
The move is in line with the company's plans to diversify its operations through investments around the Tianjin region, its chairman, Wang Guanghao, said yesterday.
The acquisition, which will be financed by the company's internal resources, represented an important step in expanding its businesses to the strong-growth sector of gas-fuel business.
'Moreover, it is expected that the acquisition will enlarge and diversify the earnings of the group,' Mr Wang said.
The red chip is involved in a broad range of businesses, including consumer products, infrastructure, elevators and general commercial trading.
Company officials had previously said the company had $1.5 billion cash in hand.
Tianjin Development said its mainland parent, Tsinlien, had guaranteed that the company's share of net profits from the new acquisition for the period of five months to December 31 and the year ending December 31 next year would be not less than $10 million and $25 million.