On
"Our financing and acquisition of Dadi Gas represent major milestones for China New Energy," said Mr. Yangkan Chong, Chief Executive Officer. "With a long established brand name, a complete business model, a seasoned technical team, and its state-of-the-art technologies, we believe Dadi Gas will significantly enhance our position in China's natural gas industry. Our financing provides us with the financial strength to make this very attractive and strategic acquisition."
Dadi Gas is a vertically integrated natural gas distribution company and one of the top four private city gas companies in China. It currently operates in northern and central China and holds long term exclusive franchise agreements with local municipalities. Dadi Gas generates revenues from selling natural gas products and services to residential, commercial and industrial customers in these municipalities and from the transportation of natural gas. Beyond its city gas operations and industrial gas supply business, Dadi Gas engages in the sale and leasing of gas equipment and operates gas filling stations. Dadi Gas is the only private gas enterprise in China which owns a gas transportation unit and controls a fleet of over 100 gas transportation vehicles. Dadi Gas holds several national patents and is recognized nationally as a "high-tech" enterprise by the PRC government. As such, it enjoys national high-tech enterprise preferential tax treatment.
Mr. Chong added, "We anticipate that the acquisition will bring about substantial synergies, including guaranteed and steady supply of gas from upstream suppliers; better pricing for gas, related products and other purchases; lower transportation costs; lower operating expenses; and flexible mobilization and placement of professional and technical staff. In addition, we expect the acquisition to improve our cash flow and overall financial position, creating great opportunities for revenue, profit growth, and an increase in shareholder value."
Pursuant to the Equity Transfer Agreements, the purchase price is payable
in three installments. The first installment of
On
The Equity Transfer Agreements replace the agreement originally executed
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The Company will finance the first installment of the purchase price with
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Mr. Chong concluded, "We believe that Dadi Gas is an excellent fit with our strategy of increasing our presence in fast growing second and third tier cities in China that are located in close proximity to economically developed areas with natural gas resources. We remain optimistic about the growing market for natural gas in China, and we look forward to leveraging the Dadi Gas acquisition for additional growth opportunities."
About China New Energy Group Company
China New Energy Group Company ("China New Energy" or the "Company") is a vertically integrated natural gas company engaged in the development of natural gas distribution networks, and the distribution of natural gas to residential, industrial, and commercial users in small and medium sized cities in China. The Company generates revenues primarily from the connection fees it charges its customers for interconnecting to pipelines in its natural gas distribution networks, and fees for natural gas usage. For more information, please visit http://www.cnegc.com .
Safe Harbor Statement
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Any statements set forth above that are not historical facts are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors include, but are not limited to, the Company's ability to access natural gas for distribution, and ability to identify and develop operational locations under favorable terms, changes in natural gas pricing mechanism imposed by the Chinese government, changes in the regulatory environment and future national or regional economic and competitive conditions, and other factors detailed from time to time in the Company's filings with the United States Securities and Exchange Commission and other regulatory authorities. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
For more information, please contact:
Company Contact:
Eric Yu, Chief Financial Officer
Email: ericyu@cnegc.com
Web: http://www.cnegc.com
Investor Relations Contact:
CCG Investor Relations
Mr. Athan Dounis, Account Manager
Phone: +1-646-213-1916
Email: athan.dounis@ccgir.com
Web: www.ccgirasia.com
SOURCE China New Energy Group Company