State shares sold in Shenzhen
( 2003-07-30 07:18) (China Daily)
Shenzhen, China's pioneer of market economy reforms, yesterday sold some of
the State-owned shares in a gas distribution company to a private Chinese
mainland firm and Hong Kong & China Gas -- a dominant gas supplier in Hong
Kong.
The US$60 million deal is part of the local government's massive
reform to reduce its influence over State-owned utilities
companies.
Under yesterday's deal, Hong Kong & China Gas paid around
377 million yuan (US$45 million) to take a 30 per cent share in the Shenzhen Gas
Group -- the dominant natural gas supplier in the city. New Hope Group, which is
controlled by mainland tycoon Liu Yonghao, bought 10 per cent of the shares at a
price of 125 million yuan (US$15 million). The Shenzhen Investment Management
Co, which represents the government to manage the State-owned assets, holds the
controlling 60 per cent.
The operating period for the joint venture lasts
50 years.
The deal is the second one to be reached after the government
announced its plan to sell off some State shares in five utilities firms
covering water, food, electricity, gas and transportation.
In January,
the local government sold shares of Shenzhen Energy, a major local electricity
firm, to overseas listed Huaneng Power for 2.3 billion yuan (US$278
million).
Shenzhen Gas was a hot property on the market, after the
government announced that its shares were up for sale. Major international and
domestic firms, such as BP and Hong Kong's Pava Gas and China National Offshore
Oil Co have shown a great interest in the purchase, in a hope to cash in on the
rapid growth of gas consumption in the booming city.
More importantly,
Shenzhen Gas controls 10 per cent stakes in China's first LNG terminal. Starting
from 2006, the Shenzhen-based terminal will sell US$10 billion worth imported
liquefied natural gas (LNG) to customers in energy-hungry Guangdong Province for
25 years, which is believed quite lucrative.
Hong Kong & China Gas
has already holds a 3 per cent share in the terminal.
Optimistic about
the prospects for the natural gas business on the Chinese mainland, Hong Kong
& China Gas has poured billions of US dollars into gas distribution joint
ventures in dozens of mainland cities.
It is said the company plans to
invest up to 3 billion yuan (US$362 million) in gas projects over the next two
or three years.
Li Heihu, president of Shenzhen Investment Management Co,
said the sale of the shares not only brings in fresh capital to sustain the
development of Shenzhen Gas, but brings in know-how to help the company grow
into a top-notch international utility company.
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