HONG KONG, Dec. 10, 2015 /PRNewswire/ -- Blue Sky Power Holdings Limited (or "the Company", together with its subsidiaries, the "Group", HKSE stock code: 6828) announced that, on 9 December 2015 (after trading hours), the Company and Compact Move Limited (the "Vendor") entered into a non-legally-binding memorandum of understanding (the "MOU") in relation to the proposed acquisition of certain equity interest in a company ("Target Company") which is a wholly-owned subsidiary of the Vendor. The Vendor is in the process of conducting business restructuring so that after completion of the restructuring the 100% of the registered paid-up capital of Zhejiang Bochen Energy Holding Co., Ltd. ("Zhejiang Bochen Energy") together with the underlying businesses currently held by it will be held by the Target Company free from all encumbrances.
Zhejiang Bochen Energy, based in Hangzhou, PRC, is the largest supplier of LNG in Zhejiang province. It has an established relationship with China National Offshore Oil Corporation ("CNOOC"). It signed a long term supplier contract with CNOOC and procures the LNG from the LNG receiving terminal in Ningbo owned by CNOOC (the "Ningbo LNG Terminal"). To the understanding of the Vendor, Zhejiang Bochen Energy is currently the single largest customer of LNG for Ningbo LNG Terminal and it is believed that Zhejiang Bochen Energy possesses a strong bargaining power over other competitors in the region as it has relatively competitive purchase prices of LNG. With the LNG source from Ningbo LNG Terminal, Zhejiang Bochen Energy is mainly engaged in (1) LNG trading business and (2) distribution of LNG directly to industrial users, with the support of the accompanying logistics infrastructure (including a fleet of over 36 LNG trucks).
Along the coastal areas in the PRC, LNG normally will have the price advantage over the traditional pipeline natural gas. Zhejiang Bochen Energy provides an alternative natural gas source by supplying and transporting LNG directly through the re-gastrification facilities to its customers, whom are primarily high-volume industrial users.
Mr. Tommy Cheng, Chairman and Executive Director of Blue Sky Power Holdings Limited, said, "The proposed acquisition, if proceeded, will have significant synergies with the Group's existing natural gas business, by supplementing the Group's cashflow and enlarging the Group's geographical footprint in the Eastern seaboard, especially the Zhejiang province; establishing a stronger platform for the Group's LNG trading business; and providing a significant downstream demand of LNG from its high-volume industrial users for the Group's procured and imported LNG."
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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.