From the SCMP:
Shanghai-listed ENN Ecological Holdings, a subsidiary of ENN Group, the parent of Hong Kong-listed ENN Energy, has agreed to buy a 11.7 per cent stake in Australian oil and gas producer Santos for US$750 million.
ENN Group will become Santos’ largest single shareholder. The stake was purchased from the mainland China-based private equity group Hony Capital.
The deal marks a new twist in China’s outbound investment boom. Normally, it’s China’s state-owned enterprises that are the big buyers of foreign upstream oil and gas assets, whereas deals by privately-owned entities, such as ENN Ecological, are rare.
“The proposed acquisition is an exciting move for ENN,” ENN Group chairman Wang Yusuo said in a statement. “This introduction to the upstream [oil and gas] sector takes us a step forward in our aim to generate value across the entire natural gas value chain.”
As part of the deal, Hony Capital will become a “strategic investor” via a US$380 million private new share placement in ENN Ecological, which is in the coal and chemical businesses.
ENN Energy sold 11.3 billion cubic metres of natural gas in China last year, around 5.7 per cent of the nation’s annual consumption.
You may recall that ENN also recently signed long term heads of agreement for contract deals with Gorgon and APLNG. It appears Hony is getting out taking a serious paper loss though it only rolling that into ENN.
