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 January 6, 2016 - 8:52 AM EST
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Beijing Gas Invests HK$1.32 Billion and Will Become the Single Largest Shareholder of Blue Sky Power

-- Also Injects Natural Gas Distribution Business in Guangxi

HONG KONG, Jan. 6, 2016 /PRNewswire/ -- Blue Sky Power Holdings Limited (or "the Company", together with its subsidiaries, the "Group", HKSE stock code: 6828) announced that, Beijing Gas Group Company Limited ("Beijing Gas"), a wholly-owned subsidiary of the Beijing Enterprises Holdings Limited ("Beijing Enterprises", HKSE stock code: 392), has invested HK$1.32 billion and will become the single largest shareholder of Blue Sky Power. Beijing Gas has also injected its natural gas distribution business in Guangxi into the Company.

Beijing Gas subscribes 2.15 billion Subscription Shares

On 5 January 2016, the Company entered into a Share Subscription Agreement with Beijing Gas, of which Beijing Gas agreed to conditionally subscribe 2.15 billion Subscription Shares at the Subscription Price of HK$0.45 per Subscription Share, at a discount of 11.76% to the closing price of HK$0.51 per Share as quoted on the Stock Exchange on 4 January 2016. The Subscription Shares represents 26.11% of the total issued Shares as enlarged by the allotment and issue of the Subscription Shares.

The Company also entered into a CB Subscription Agreement with the Beijing Gas pursuant to which Beijing Gas conditionally agreed to subscribe in cash for the Convertible Bond of an aggregate principal amount of HK$350 million. Based on the initial Conversion Price of HK$0.45 per Share and assuming full conversion of the Convertible Bond, a maximum number of 777.78 million Shares will be allotted and issued by the Company which represents 11.31% of the issued share capital of the Company as enlarged by the issue of Conversion Shares.

The Board will appoint 2 directors nominated by the Beijing Gas as a non-executive director and co-chairman of the Board, and an executive director respectively.

Beijing Gas is the municipal gas supplier in terms of a single city and is in a leading position in terms of pipeline scale, volume of gas customers, annual gas consumption and sales proceeds in the PRC. It possesses numerous valuable resources on natural gas segment, including connection and relationship with local gas sources and downstream distribution networks, and high-quality and mega-sized natural gas projects in the PRC.

Acquires 51% interest of Beijing Gas's natural gas distribution business in Guangxi

Meanwhile, the Group proposed to acquire 51% interest of Beijing Gas's natural gas distribution business in Guangxi, at a total consideration of HK$152 million. The consideration is to be satisfied by the issuance of the Consideration Shares, at the Issue Price of HK$0.45 per Share. The Consideration Shares represent 5.25% of the enlarged issued share capital of the Company upon completion of the Acquisition Agreement. The Project Company has entered into the franchise operation agreement with the local government of Teng County of Guangxi Province, pursuant to which the Target Company is granted an exclusive operation right for 30 years commencing from year 2016 to invest in and operate the city pipeline system to provide and distribute piped natural gas to industrial parks, residential users and commercial users in the areas of Teng County.

Immediately after the issue and allotment of the Subscription Shares and the Consideration Shares, total number of issued shares of the Company will be about 8.59 billion, in which Beijing Gas will hold approximately 29.0% of the shareholding in Blue Sky Power.

Mr. Tommy Cheng, Chairman and Executive Director of Blue Sky Power Holdings Limited, said, "We believe that the Group can leverage on the experience, expertise and resources of Beijing Gas and further develop and provide synergy effects to the natural gas business of the Group in the PRC. We consider that it represents a good opportunity to raise substantial capital for the Group while broadening its Shareholders and capital base; improve the financial position and liquidity of the Group; and provide the Company with the financial flexibility necessary for our future business development and the capability to capture any prospective investment opportunity as and when it arises. Moreover, we consider the proposed acquisition a prime opportunity for the Company to expand into the Guangxi market, in which the Company does not have any presence for the moment."

Blue Sky Power Holdings Limited

Blue Sky Power Holdings Limited (HKSE stock code: 6828) 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, Hubei, Hainan, Sichuan and Liaoning Provinces.

Source: PR Newswire (January 6, 2016 - 8:52 AM EST)

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