Hong Kong, Nov 03, 2011 (ACN Newswire via COMTEX) -- Tianjin Tianlian Public Utilities Company Limited ("Tianlian" / "the Company") (sehk:1265) announces that the Board of the Company has been informed by its 51.30%-stake controlling shareholder Tianjin Gas Group Company Limited ("Tianjin Gas") that today Tianjin Gas and China Resources Gas (Hong Kong) Investment Limited ("China Resources Gas (HK)"), a wholly-owned subsidiary of China Resources Gas Group Limited (sehk:1193) had entered into the Joint Venture Agreement and the Supplemental Agreement relating to the Proposed 51%:49% JV. Pursuant to the Supplemental Agreement, it is agreed that after establishment of the Proposed JV, all existing natural gas-related business of Tianjin Gas will be taken over by the Proposed JV, which will include, inter alia, the domestic shares of the Company held by Tianjin Gas. It is the intention of both parties that the Proposed JV would combine and consolidate the respective assets and businesses of the Proposed JV and the Company such that the Company would become the listing vehicle for such assets and business. Application has been made by the Company for the resumption of trading in the H shares with effect from 9:00 a.m. on 3 November 2011.
Pursuant to the Joint Venture Agreement, Tianjin Gas and China Resources Gas (HK) will set up the Proposed JV in the PRC. Tianjin Gas and China Resources Gas (HK) will own 51% and 49% respectively of the registered capital of the Proposed JV, which will be RMB5 billion.
Tianjin Gas will contribute its share of registered capital of RMB2.55 billion by way of injection of its natural gas-related operational assets (which will not include the domestic shares of the Company held by Tianjin Gas) and China Resources Gas (HK) will contribute its share of registered capital of RMB2.45 billion by way of cash. The board of directors of the Proposed JV will comprise of seven directors. Tianjin Gas is entitled to appoint four directors while China Resources Gas (HK) is entitled to appoint the remaining three directors. The chairman of the board of directors of the Proposed JV shall be nominated by Tianjin Gas. It was further agreed that Tianjin Gas will inject its remaining natural gas-related assets to the Proposed JV with details to be determined by the parties by separate agreement(s). Each of Tianjin Gas and China Resources Gas (HK) agrees that after incorporation of the Proposed JV, each of them (including its subsidiaries) and the Proposed JV will not compete with each other in the same industry and will not develop the same or competing business in the operational areas of the Proposed JV.
Board Chairman of Tianlian and Chairman of Tianjin Gas, Mr. Jin Jianping said, "We are pleased to have finalized the cooperation details with China Resources Gas for the proposed JV. The move can accelerate nurturing the gas projects under the Tianjin Gas's flagship as well as make Tianlian becomes the listing vehicle for such assets and business that bring better returns to our shareholders. The 12th Five Year Plan of National Economy expands the supply of natural gas for 10 times and the Company will continue to benefit from the development of Binhai New District in Tianjin City. Looking ahead, we will expand our business scale through the assistance of our parent company Tianjin Gas and capture the growth potential of natural gas."
With around 50 years' history, Tianjin Gas, a State-owned enterprise owned by Tianjin Municipal Government, is the largest natural gas supplier in Tianjin City. Its supply gas covers 18 districts and counties in Tianjin City with over 95% of market share. As at 4 October 2011, Tianjin Gas held 943,517,487 Domestic Shares, representing approximately 51.3% stake in the Company, and was a controlling shareholder of the Company. Tianjin Gas has successfully injected its natural gas-related operational assets worthed RMB7,190,000, RMB89,510,000 and RMB620,000,000 into Tianlian in 2006, 2008 and 2009 respectively.
Currently, Tianlian has 454,000 users, including 450,000 residential users and 3,385 commercial users, while Tianjin Gas has 1,900,000 users, including 1,890,000 residential users and 12,000 commercial users. The gas pipe of Tianlian and Tianjin Gas are 1,834 kilometers and 9,000 kilometers respectively.
The Company has been transferred its listing status from the GEM Board to Main Board on 18 October 2011. It is principally engaged in the sales of piped gas and provision of gas connection services in five districts and counties in Tianjin City and Jining in Inner Mongolia, the PRC.
About Tianjin Tianlian Public Utlities
Tianjin Tianlin Public Utilities Company Limited is a Hong Kong-based company engaged in the operation and management of gas pipeline infrastructure and the sale and distribution of piped gas. The Company has been divided into three divisions; gas connection, sales of piped gas and sales of gas appliances. On 6 June 2008, the Company entered into an asset transfer agreement (Asset Transfer Agreement) with Tianjin Gas, whereby the Company agreed to acquire, among others, certain pipe network, machinery equipment and ancillary facilities of pipe network. The operations of the Company are located in the Peoples Republic of China. www.tianliangas.com