Published September 2, 2008
Wilmar to pay US$36m for Fortune Gas stake
Move to capitalise on China's emerging gas sector
By CHOW PENN NEE

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IN a move to capitalise on China's emerging gas sector, palm oil play Wilmar International Limited is investing US$36 million for a 15 per cent stake in Fortune Gas Investments Holdings - a holding company for London-listed Fortune Oil's gas business.
The investment is part of a conditional subscription agreement which also sees Star Medal - owned by the Kuok Group in Hong Kong - paying US$36 million for a similar stake.
Hong Kong-headquartered and London-listed Fortune Oil owns oil and gas supply infrastructure in China.
It will own the remaining 70 per cent stake in Fortune Gas. Fortune Gas is a Hong Kong-registered company holding all of Fortune Oil's gas operations, including gas distribution and coal bed methane.
Both Wilmar and the Kuok Group have substantial business interests and experience in China that will assist in the development of Fortune Gas, Fortune Oil said in an announcement released by Wilmar.
The cash raised from the investment will 'accelerate the creation of an integrated gas business through acquisitions and investments across the gas chain, from coal bed methane to retail compressed natural gas stations', Fortune Oil said. 'With the new strategic investors, Fortune Gas will be able to maintain its high rate of growth and capture the many opportunities in China's emerging gas sector,' it added.
Funds raised from the investment will be used to finance further expansion of the gas business.
The investment is subject to completion of certain due diligence and Fortune Oil and Fortune Gas having to provide warranties and indemnities to the new investors concerning the gas business. Completion is expected within two months.
Fortune Oil chairman Qian Benyuan said: 'This significant investment by the Kuok Group and Wilmar International represents a crucial step in the development of Fortune Oil's gas operations in China and demonstrates the investors' confidence in the prospects for this division.'
Mr Qian added: 'As well as providing funding for additional investment within China's rapidly growing gas sector, our new partners bring extensive industry experience that will assist the successful development of Fortune Oil's integrated gas business.'
For the six months ended June 30, 2008, Fortune Gas reported an unaudited operating profit of £pounds;2.3 million (S$5.9 million), with unaudited gross assets of £pounds;63.7 million.