MELBOURNE, March 24 (Reuters) - Chinese private gas distributor ENN is set to become the top shareholder in Australia's Santos Ltd after agreeing to buy an 11.7 percent stake for $750 million from Hony Capital, in a push to get into gas production.
Santos said on Friday it had approved the transfer of Hony's stake to ENN Group's ENN Ecological Holdings Co 600803.SS . Hony acquired most of its stake last November when Santos sold A$3 billion in new shares to help it slash debt. introduction to the upstream sector takes us a step forward in our aim to generate value across the entire natural gas value chain, and allows us to learn and build experience," ENN Group chairman Wan Yusuo said in a statement late on Thursday.
Chinese gas distribution companies, like ENN, are looking to acquire interests in gas producers to lock in supplies of liquefied natural gas (LNG) and ease their dependence on state-owned giants CNOOC Ltd 0883.HK , PetroChina 601857.SS and Sinopec 600028.SS , bankers have said. is building China's first private LNG receiving terminal in Zhoushan, set to handle 3 million tonnes a year, starting in 2018.
The $750 million that ENN is paying for the Santos shares is well above the A$700 million Hony invested last November, which at the time was worth $492 million.
As part of the deal, Hony, one of China's most successful private equity funds whose backers include state-sponsored Legend Holdings 3396.HK , Singapore's Temasek and Abu Dhabi Investment Authority, will acquire a $380 million stake in ENN.