MSPEA-Backed Go-Private Deal Of Sino Gas International Won Board Approval

Chinese natural gas distributor Sino Gas International Holdings, Inc. says a take-private deal of the company has received board approval, according to a company announcement.

Initially announced a year ago on April 3, 2013, the deal is led by the company’s chairman and CEO, Liu Yuchuan, Morgan Stanley Private Equity Asia (MSPEA), and Hong Kong-listed Chinese gas service operator, China Zhongyu Gas Holdings Ltd.

The buyer consortium proposed to pay US$1.30 per share to acquire all outstanding shares of Sino Gas, which is listed on the Over-The-Counter Bulletin Board (OTCBB) in the U.S. The OTCBB has no listing requirements.

The deal values Sino Gas at approximately US$74.9 million on a fully diluted basis.

The transaction is to be financed with US$28.96 million committed by MSPEA; US$37.45 million committed by Zhongyu Gas, and rollover equity contributed by company CEO Liu Yuchuan, who owns 11.3% of Sino Gas.

The deal is still pending a shareholder vote and other closing conditions. It is subject to a break-up fee.

China Expert network