ENN firmly on the acquisition trail as smaller gas distributers continue to be bitten hard by rising finance costs
18-month campaign to clamp down on shadow-banking market shrinks available credit for struggling operators
ENN Energy Holdings, one of China's largest natural gas distributors, is in talks to buy smaller rivals being squeezed by rising finance costs, as it raises its imported gas supply and builds storage facilitates to avoid getting caught out again by ferocious demand for cleaning fuel this winter, amid Beijing’s ongoing war on air pollution.
“There are ample acquisition opportunities and we will consider moving on some of them,” executive director Wang Dongzhi said, the day after the firm unveiled interim profits in line with expectations.
“Our average financing cost of 3.9 per cent in the first half was well below those of small and medium-sized players.
“The players we are in discussion with have poor returns due to rising financing costs ... they also lack our competitive advantages of having sealed stable long-term gas supply and logistics deals.”
The players we are in discussion with have poor returns due to rising financing costs ... they also lack our competitive advantages of having sealed stable long-term gas supply and logistics deals
Wang said small and medium-sized companies, many of which are in Sichuan and Shandong provinces, have a total share of no more than 20 per cent of the mainland’s gas distribution market.