appConfigEntityId

bodyType

customContents

entityId

entityUuid

isVideo

articlePageQuery

article

articleSchemaContent

content

hooksArticlePageAdvertisementConfigArticle

appConfig

filter

json

liveArticle

Denise Tsang

State-owned conglomerate China Resources Holdings will sell a portfolio of seven piped-gas projects to Hong Kong-listed China Resources Logic for HK$3.81 billion in an attempt to shore up the profit-challenged subsidiary.
In a surprise announcement yesterday, CR Logic said the deal would transform it from a concrete maker into the gas distribution flagship of the China Resources empire and paved the way for further asset injections.
CR Logic  would fund the deal by issuing rights shares for HK$3.86 billion on the basis of four rights shares for  each existing share at a substantial discount to its last traded price.
CR Logic, which cited deteriorating conditions in global economies and capital markets, said the parent guaranteed that the after-tax profit of the gas portfolio would be at least HK$250 million in the current year to December.
'The acquisition marks the starting point in positioning CR Logic as the city gas distribution flagship of CR Holdings,' CR Holdings chairman Song Lin said.
CR Logic saw its profit tumble 34 per cent to HK$152.36 million last year even though it has made several moves to focus on the technology, textile, retail, food and brewery sectors in the past few years.
The gas projects in question are the provision of piped-gas services to residential  and commercial users and bottled liquefied petroleum gas. It also includes the operation of vehicle gas-refilling stations in seven cities - Chengdu, Fuyang, Huaibei, Linhai, Nanjing, Suzhou and Wuxi.
CR Logic announced further acquisitions from the parent, which runs 22 piped-gas projects  across the country in addition to the seven projects in question.
As for the funding of the latest deal, CR Logic planned to sell 1.13 billion rights shares at HK$3.42 apiece, a 14.5 per cent discount to the last traded price on Tuesday or a 29.9 per cent discount to the average closing price of HK$4.88 in the five consecutive trading days to Tuesday.
CR Holdings, which holds 68.83 per cent of CR Logic, promised to subscribe to its portion of the rights shares for about HK$2.7 billion.
CR Logic plans to install a new management team and  will be renamed China Resources Gas Group, joining the fray with other listed gas utilities such as Hong Kong and China Gas (Towngas), Xinao Gas Holdings and China Gas Holdings for the mainland's fragmented but competitive city gas market.



China Resources to sell HK$3.8b piped-gas assets to CR Logic