The Newswire

Your daily serving of financial goodness

ENN Group Set to Become Largest Shareholder in Santos

ENN Group Set to Become Largest Shareholder in Santos
ENN Ecological Holdings will become the largest shareholder within Santos, a title previously held by Private Equity firm Hony Capital.
Mar 24, 2016 By Ben Khouri Tags: STO

ENN Ecological Holdings, a subsidiary of ENN Group, is planning to acquire Hony Capital’s 11.7% holding in Santos (ASX:STO) for US$750million, subject to its shareholders approval. Upon completion of the acquisition, ENN Ecological Holdings will become the largest shareholder within Santos, a title previously held by Private Equity firm Hony Capital.

Speaking on the matter, ENN Group Chairman Mr Wang Yusuo said: “The proposed acquisition is an exciting move for ENN. This introduction to the upstream sector takes us a step forward in our aim to generate value across the entire natural gas value chain, and allows us to learn and build experience.”

Additionally, the two companies also agreed that Hony Capital will become a strategic investor within ENN’s A-share listed company. This will be through a private placement of new shares, equating to around US$380million.

Between 2001 and 2015, ENN Group has established itself as the largest private natural gas company in China. In 2015 alone, it sold 11.3billion cubic metres. Moreover, the company supplies more than 12 million households in 152 cities across China and more than 56,000 industrial and commercial users.

Mr. John Zhao commented on the proposal: “Hony prides itself on taking a long term view and focusing on value creation for the companies in which we invest. We chose to invest in Santos because of its strategic position in Australia and synergies with the rapidly growing China market. Bringing in ENN as a strategic investor will help Santos connect to that opportunity in China, and at the same time we are helping the Chinese company expand internationally.”

Santos FY15 Results

The oil explorer incurred a $2.7 billion loss during FY15, as its revenue dropped 20% and operating cash flow contracted 41% compared to the pcp.

As at 11.36am (AEDT), STO has surged almost 2%, to $4.00.

Share this article

Ben Khouri Author: Ben Khouri Mar 24, 2016

Ben Khouri is a financial editor for Wise-Owl with a particular focus on the top ASX 300 companies. Having a vast background in economics and finance, Ben provides financial commentary & analysis as well as global market updates, which guide investors in devising investment strategies. Ben specialises in analysing economic data and global events from around the world and examines the impacts they have on the major equity markets.

Frontier Diamonds a rare gem for ASX investors?

Diamonds were a scarce resource until 1866 when the first discovery of the Eureka Diamond near Hopetown, South Africa sparked a dramatic increase in global production of gemstones

Author: Simon Herrmann Nov 22, 2017

Errors

Sign Up for Free Trial
Subscribe
Recent Tweets
Recent News