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ENN EC to raise cash from qualified investors
Posted on Wednesday, 11 September 2019 13:06
ENN Ecological Holdings (ENN EC) is raising fresh equity to finance the cash element of the purchase of a 32.8 per cent stake in ENN Energy from ENN Group International (EGII) as part of an intra-group restructuring.
The Shanghai-listed natural gas company is taking advantage of the rapid development and changes currently sweeping across the sector as Beijing promotes the reform of the energy system to meet urbanisation.
With a focus on the upstream segment, such as production, ENN EC has been refocusing on its businesses in energy engineering, methanol and coal.
The deal opens up the group to downstream activities across the construction and operation of pipelines, managing petrol stations and distributing gas to customers.
As an integrated player across the industry chain, ENN EC will be better positioned to seize market opportunities and fight off competition.
The company will raise matching funds via a private placement of 245.87 million new shares to as many as ten investors and equating to no more than a fifth of its pre-offering capital.
Proceeds will not exceed the transaction price of the assets purchased by way of consideration shares of CNY 9.88 apiece in the ENN Energy deal.
The private placement was worth CNY 2.31 billion (USD 324.75 million) in the markets by the time a trading halt was put in place on 30th August.
Based on the price of the payment stocks in the ENN Energy transaction, the cash call has a value of CNY 2.42 billion.
The last time ENN EC raised funds was February 2018, when it completed a CNY 2.27 billion rights issue comprising the sale of 243.57 million stocks at CNY 9.33 apiece.
Its latest capital increase is by no means the largest by a mainland-based company announced in 2019 to date; the biggest is currently Bank of Beijing’s preference share issue worth USD 5.97 billion.
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