The total purchase price will be based on a multiple of Dadi Gas’ net profits for the fiscal year ended December 31, 2009 and has been capped at RMB392.15m. The transaction’s closing is contingent upon certain conditions being met, including the transfer of all Dadi Gas’s permits and other rights to operate its urban gas pipelines.
Yangkan Chong, CEO of China New Energy, said: “Upon completion, our acquisition of a majority stake in Dadi Gas will expand China New Energy’s business into Northern China, including the Beijing Metropolitan area, one of the most important markets in the country.
“The Northern China region is densely populated, prosperous, and has a rich supply of natural gas. We are executing our strategy to grow our customer base, diversify our revenue, and build shareholder value through key acquisitions, and this is an important step in our transformation into a truly national gas company.”
Dadi Gas is primarily engaged in the business of the supply of natural gas and construction and development of a gas pipeline network in Northern China.
China New Energy is engaged in development of natural gas distribution networks and distribution of natural gas to residential, industrial and commercial users in small and medium sized cities in China.
