Tianjin Jinneng Lingang Thermal Power is an oil and energy company engaged in the production and supply of steam in Tianjin, China
Tianjin Tianbao agrees to acquire Tianjin Jinneng Lingang thermal power. (Credit: Kirill M/Pixabay.)
China-based electricity generation services provider Tianjin Tianbao Energy has signed an equity transfer agreement to acquire a majority interest in Tianjin Jinneng Lingang Thermal Power.
Tianjin Jinneng Lingang Thermal Power is an oil and energy company engaged in the production and supply of steam in Tianjin, China.
Under the agreement, the company will acquire the 51% equity interest in the Tianjin Jinneng Lingang Thermal Power for a total consideration of RMB139.13m ($20m).
Tianjin Tianbao is expected to pay RMB100.88m ($14.4m) of the total purchase price in cash and provide a guarantee for an amount of RMB38.25m ($5.4m).
Upon the completion of the transaction, the company will own a 51% interest in Tianjin Jinneng Lingang Thermal Power, which will become a non-wholly owned subsidiary of the company. The remaining 49% interest is owned by Lingang Public Utilities.
In relation with the transaction, Tianjin Tianbao has paid RMB30m ($4.2m) as a deposit during the deal announcement, which was held in escrow by Tianjin Property Rights Exchange for the company.
Tianjin Jinneng Lingang Thermal Power secured loan from China Development Bank
In November 2012, Tianjin Jinneng Lingang Thermal Power has borrowed a loan of RMB200m ($28.5m) from China Development Bank for the construction of the heating steamer and ancillary facilities and other construction works.
The outstanding amount of the loan amounts to RMB75m ($10.7m) and a previous shareholder of the Tianjin Jinneng Lingang Thermal Power and Lingang Public Utilities has guaranteed for the amount.
In addition, Tianjin Tianbao is required to provide a joint and several liability guarantees for RMB38.25m ($5.4m), as part of the consideration under the equity transfer agreement.
The company said that the acquisition marks one of its major transactions and is subject to the reporting, announcement and shareholders’ approval requirements according to Chapter 14 of listing rules. The transaction is expected to be completed subject to the fulfilment of the conditions precedent.