China’s Zhenrong Energy to take control of Titan Petrochemicals

08 August 2012 11:11  [Source: ICIS news]

SINGAPORE(ICIS)--Hong Kong-listed Titan Petrochemicals announced on Wednesday that it has entered into an agreement with Guangdong Zhenrong Energy on new share subscriptions and debt restructuring measures on 1 August.

Under the agreement, Guangdong Zhenrong Energy will buy 7bn new shares issued by Titan Petrochemicals for Hong Kong dollars (HK$) 175m ($22.6m) to become its controlling shareholder with a 89.95% stake, Titan Petrochemicals said in a statement to the Hong Kong stock exchange.

In addition, Guangdong Zhenrong Energy will provide at least $40m (€32.4) interim funding to Titan Investment Group’s storage subsidiaries in China as working capital and debt payments. Titan Investment Group will in return pass its management rights of those storage subsidiaries to Guangdong Zhenrong Energy or its nominee, the statement said.

Titan Petrochemicals is the parent company of Titan Investment Group.

Furthermore, Guangdong Zhenrong Energy will acquire the interests of the storage subsidiaries held by Titan Investment Group for a maximum of $145m, according to the statement.

The above measures are expected to save debt-ridden Titan Petrochemicals from bankruptcy, market sources said. 

Titan Petrochemicals said its debtees have appealed to wind up the company last month, after trading of its shares was suspended on 19 June following a fall of 22% this year, according to media reports.

Guangdong Zhenrong Energy is a major trader in commodities, energy and other resources in China. Titan Petrochemicals is a provider of oil logistics and marine services, including oil storage, shipping, distribution, and trading platform services.

($1 = HK$7.75)

($1 = €0.81)

By: Fanny Zhang
+65 6780 4359

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