HONG KONG, Sept. 25,2014 /PRNewswire/ -- Blue Sky Power Holdings Limited (or "the Company", together with its subsidiaries, the "Group", HKSE stock code: 6828) is pleased to announce that it has entered into an Agreement on 24 September 2014 through its non-wholly-owned subsidiary, Shenzhen Yaojiade Energy Resources Limited, to acquire 75% equity interest in a company engaged in natural gas projects in Sichuan Province, the PRC, for a total consideration of RMB17,250,000 (the "Consideration").
According to the Agreement, RMB8,625,000 of the Consideration will be settled by cash, which will be financed by the Company's internal cash resources. The remaining balance of RMB8,625,000 will be settled by the issue of 3,061,148 Consideration Shares by the Company at the price of HK$3.56 per Consideration Share.
The target company of the acquisition, Sichuan Rich Reid Energy Development Co., Ltd. (the "Target"), is engaged in natural gas, shale gas and coal energy investment business. It currently operates and manages power generation plants in Sichuan Province with an aggregate installed capacity of 1,000KW fuelled by shale gas. The Target has also entered into the shale gas supply contract with the Zhejiang branch company of PetroChina Company Limited for the procurement of shale gas, which then utilized the shale gas as a source of clean fuel to operate and manage the power generation plant to generate electricity. The Target has secured the sales agreement with its customer "Sichuan Neng Tou Jun Lian Energy Company Limited", the provincial grid company in Sichuan Province for the sales of electricity generated from its power plants. The Target also intends to invest in a natural gas liquefaction facility which will utilize the shale gas as the gas source and be processed into liquefied natural gas ("LNG") for selling. It is expected that following the Completion, the Company can be vertically integrated with the Target in distributing LNG to the Group's own gas stations and become a wholesaler of LNG to other gas station operators.
Mr. Hung Tao, Executive Director of Blue Sky Power Holdings Limited, said, "the Company has begun to diversify into the natural gas supply business in the PRC since late 2013. This acquisition will further strengthen our market presence and strengthen our existing portfolio in the PRC. The PRC government has been consistently and continuously showing its determination in increasing the utilization of clean energy natural gas to ease the air pollution problem in the PRC. Also, in recent years, the PRC government has also emphasized shale gas exploitation and exploration, taking shale gas as part of the country's new energy strategy. In view of the above, we believe the prospect of the target company will be promising. The acquisition is a prime opportunity for the Company to diversify the revenue stream and is expected to increase the shareholders' value."
Blue Sky Power Holdings Limited
Blue Sky Power Holdings Limited is engaged in the natural gas distribution business in the PRC since late 2013 and has entered into agreements to acquire natural gas business in the PRC, including Shandong, Jiangsu and Liaoning Province.
