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 November 29, 2015 - 5:45 PM EST
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Tian Lun Gas to Acquire Sichuan Ming Sheng Natural Gas for RMB460 Million

Deal will expand market share in southwest China; further strengthen strategic national coverage

HONG KONG, Nov. 30, 2015 /PRNewswire/ -- China Tian Lun Gas Holdings Limited (Tian Lun Gas; HKEx stock code: 1600) announced that it had entered into an equity transfer agreement on 28 November 2015. Under the terms, it would acquire the entire equity interest in Sichuan Ming Sheng Natural Gas Company Limited (Ming Sheng Natural Gas) for RMB460 million in cash, enabling economies of scale. The acquisition will increase the market share of Tian Lun Gas in southwest China and further strengthen the strategic national coverage of its urban gas operations.

The acquisition comes on the back of two other major acquisitions earlier this year -- both 100% equity stakes in Beijing Hui Ji Tai Zhan Investment Company Limited; as well as Qian County Hong Yuan Natural Gas Company Limited and Li Quan Hong Yuan Natural Gas Company Limited. The latest acquisition represents another key strategic and influential move by the Company to maintain its rapid growth trajectory, and to increase its competitiveness.  

Tian Lun Gas will obtain a core urban gas operation in the Xindu District of Chengdu City, Sichuan Province upon the completion of the acquisition. The district is positioned as the northern suburb of Chengdu, as it serves as a hub for Chengdu in the areas of mechanical, electronics, food, biopharmaceutical, tourism and logistics. The district will be developed into a more prosperous community with a growing population that is expected to bring immense potential for development and growth to the project. In addition, the acquisition enables the Company to achieve economies of scale along with other urban gas projects in Gansu Province, Shanxi Province and Yunnan Province. This is key to supporting the Company's future expansion in Sichuan Province, and reinforcing its strategic presence in southwest China.

Ming Sheng Natural Gas has a residential customer base of 100,000 and nearly 2,000 industrial and commercial users. It has generated approximately 60 million cubic meters of gas per year in sales volume, with revenue of approximately RMB180 million. In 2014, it recorded a net profit of approximately RMB45.11 million excluding non-recurring items. In view of these considerations, there is significant growth potential for Ming Sheng Natural Gas. Having secured gas sources from both China Petroleum and Chemical Corporation, Southwest Oil and Gas Branch and China National Petroleum Corporation, Ming Sheng Natural Gas expects to see steady development in its business. In addition, Sichuan is the first province in China using natural gas, and has a large talent pool in the gas industry. Ming Sheng Natural Gas has a large pool of talent within its organization, which can help Tian Lun Gas expand its talent pool after the acquisition.

Zhang Yingcen, Chairman of Tian Lun Gas said: "The acquisition of Sichuan Ming Sheng Natural Gas will increase our market share in southwest China. We will continue to expand our urban gas exclusive operation areas through mergers, acquisitions, restructuring and partnership, to tap the market potential of neighboring towns in a timely manner, and to improve the gasification rate in service areas. Meanwhile, we will continue to grow by seizing every opportunity in the industry. Under our mission of 'Promoting Clean Energy, Improving the Living Condition' and our 'Customer First' philosophy, Tian Lun Gas will remain focused on its development of natural gas, to become a renowned domestic energy distribution company in China." 

Tian Lun Gas currently owns 51 urban gas projects in 17 provinces such as Jilin, Henan, Hebei, Shandong, Shanxi, Gansu, Guangdong, Guangxi, Yunnan, Hunan, Hubei, Chongqing and Sichuan etc.  As at the end of June 2015, the Group's residential user base grew from 170,000 to 860,000 households over Q4 2010, at a CAGR of 43%. The number of industrial and commercial users also rose from 1,000 to 4,500, at a CAGR of 55%. The Group believes it will reach the one million users threshold in the foreseeable future.

Tian Lun Gas was the only natural gas company featured in Forbes China's Top 100 Most Promising Enterprises in 2012, 2014 and 2015. The rankings feature enterprises with the highest potential in the PRC. Tian Lun Gas's achievement hence attests to market recognition of its growth potential.

About China Tian Lun Gas Holdings Limited

China Tian Lun Gas Holdings Limited is one of the major domestic gas operators in China. The Company is principally engaged in three areas, comprising: city gas, LPG stations and production and sales of LNG, as well as long-haul gas pipeline construction and direct supply to industrial users. The Company currently owns 51 city gas projects, more than 50 CNG/LNG refilling stations (38 in operation; more than 12 under construction), two LNG processing plants under construction and three long-haul gas pipelines projects in operation in 17 provinces such as Jilin, Hebei, Shandong, Henan, Hunan, Chongqing, Guangdong, Guangxi, Yunnan, Gansu Shaanxi and Sichuan etc.

Tian Lun Gas Recent Milestones:

  • November 2015 - Acquired a 100% equity stake in Sichuan Ming Sheng Natural Gas Company; taking on ownership of gas operation project in Xindu District, Chengdu City, Sichuan Province.
  • September 2015 - Tian Lun Gas signed a US$60 million loan agreement with IFC
  • May 2015 - IFC and IFC Asset Management Company's Global Infrastructure Fund became the second-largest shareholders of the Company upon completion of the subscription agreement, and together hold 18% (9% each) of the Company's shares.
  • March 2015 - Acquired a 100% equity stake in Beijing Hui Ji Tai Zhan Investment Company Limited, which was awarded an urban gas project in Sanming City, Fujian Province; owns two long-haul natural gas pipelines in Wujiang City, Jiangsu Province and Pingdingshan City, Henan Province respectively, and holds a 19% equity stake in Ping Ding Shan Gas Limited.
  • January 2015 - Acquired a 100% equity stake in Qian County Hong Yuan Natural Gas Company Limited and Li Quan Hong Yuan Natural Gas Company Limited, Xianyang, Shannxi, which were awarded two urban gas projects in Qian County and Li Quan County,Xianyang, Shannxi Province.
  • May 2014 - Acquired a 90% equity stake in Shantou City Chenghai Gas Construction Company Limited, which was awarded two urban gas projects in Chenghai District and Chaoyang District, Shantou City, Guangdong.

Media Contacts - Hill+Knowlton Strategies Asia

Samantha Wang

Tel: (852) 2894 6266


Francesca Yeung

Tel: (852) 2894 6220


Source: PR Newswire (November 29, 2015 - 5:45 PM EST)

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