Hony Capital Engineers China-Australia Gas Deal

Hony Capital has agreed to sell a US$750 million stake in Australian gas producer Santos to Chinese gas distributor ENN Group, while it plans to buy a US$380 million stake in ENN in a transaction aimed at pushing cross-border expansion between the two companies.

China’s ENN will become the top shareholder in Santos with a 11.7% stake, in a move that will ease the private Chinese gas distributor’s dependence on state-owned gas producers by potentially sourcing gas from Santos.

ENN is paying approximately A$4.84 a share, a 23% premium to Santos’ last closing price.

Hony Capital acquired most of its Santos stake last November when the Australian company sold A$3 billion in new shares to slash debt.

The private equity unit of Legend Holdings will serve as a strategic investor and partner to help ENN Group accelerate future growth overseas, and to help Santos connect to rising demand for natural gas in China.

China Expert Network
China Expert network