Panva Gas Holdings has sealed its biggest acquisition, paying 395 million yuan for a 50 per cent interest in a Jilin gas project. The project will serve as a stepping stone into northeast China for the piped-gas supplier and expand its scattered portfolio in Sichuan, Guangdong, Jiangsu, Shandong and Anhui provinces. It would figure in Panva's profit and loss account on completion of the deal, a spokeswoman said. The acquisition is part of the company's aggressive push into the thriving, yet increasingly competitive, gas sector, with managing director Wayne Chen Wei saying earlier this month that about five deals could still be signed this year. According to a sale and purchase agreement, Panva agreed to pay 379.2 million yuan to the state asset authority in Changchun for a 48 per cent stake in Changchun Gas Holdings and 15.8 million yuan to Shenzhen Hua Fu Investment for a 2 per cent interest. A key asset of Changchun Gas is a 60 per cent shareholding in Shanghai-listed A share Changchun Gas Co. The principal business of both companies includes the building of gas pipelines and the supply of coal gas, natural gas and liquefied petroleum gas to customers in Changchun, Jilin. The acquisition price represents a 24 per cent premium to Changchun Gas Holdings' unaudited net asset value of 636 million yuan. The net profit of Changchun Gas Holdings was not disclosed but Panva said Changchun Gas Co's net profit soared 62.54 per cent to 146.45 million yuan last year. The Panva spokeswoman said the internal rate of return of the gas project would be at least 15 per cent. She pointed out that gas consumption in Changchun was growing rapidly, with gas already available to about 62 per cent of the city's three-million-strong urban population. Changchun Gas Holdings was serving 506,483 residential customers and 2,213 commercial and industrial customers, the spokeswoman said. Sitting on a cash reserve of HK$854.28 million, Panva could finance the acquisition internally. However, banking sources said the company was planning to return to the debt market with a bond issue of US$200 million to $300 million. The acquisition, which represents 27.21 per cent of Panva's assets, requires shareholder approval. There is no deadline yet on the deal.