Blue Sky Power Proposed to Acquire a Natural Gas Company in Jilin

 Blue Sky Power Holdings Limited is pleased to announce that, Goldlink Capital Limited, a direct wholly-owned subsidiary of the Company, and the Vendors entered into a MOU in relation to the Possible Acquisition of the entire equity interest of OctoNet Limited and Shenzhen City Jiemei Shihua Investment Company Limited.

After completion of the Acquisition, the Company will own the entire equity interest of Jilin Haoyuan Gas Co., Ltd. (Jilin Haoyuan). It mainly engages in the supply of piped gas to residential households, commercial users and public buildings, and operation of two CNG refueling stations for vehicles. Currently, Jilin Haoyuan completed the connection for approximately 150 thousand residential households and approximately 500 commercial and public users. During the year ended 31 December 2015, the total gas sales volume of Jilin Haoyuan amounted to approximately 40 million cubic meter.

Jilin Haoyuan entered into a franchise operation agreement with the local government of Songyuan City in Jilin Province, in which Jilin Haoyuan was granted the exclusive operation rights for a terms of 30 years commencing from 2004 for the supply of natural gas via gas pipelines within the Urban Planning Area in Songyuan City.

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It is expected that there will be further new connection to residential households by Jilin Haoyuan, in view of new real estate projects to be completed in Songyuan and the conversion to piped gas by existing residential areas. In addition, the Chinese government is pushing forward the ‘‘coal-to-gas’’ policy to battle with the serious smog situation in the North Eastern region, including Jilin Province. Therefore, it is expected that the business of Jilin Haoyuan will also be benefited from the policy, pursuant to which more commercial users and public buildings in the district are considering to switch to use gas-fired boilers in replacement of old coal-fired boilers for heating and air-conditioning purpose.

Mr. Tommy Cheng, Co-Chairman and Executive Director of the Group, said, “We believe that the possible acquisition is in line with our business focus and will provide an excellent opportunity for the Group to extend its existing business in relation to the sales of natural gas and other related products. It also enables Blue Sky Power to further establish our market presence and strengthen our existing business portfolio of natural gas business operations in the PRC.”

Source: Blue Sky Power
Date: Dec 6, 2016