August 10, 2012 [Reuters] - Chinese oil trader Guangdong Zhenrong Energy Co Ltd has agreed to buy control of debt-laden shipping and oil storage firm Titan Petrochemicals Group Ltd.
Under an agreement signed with Guangdong Zhenrong on Aug. 1, loss-making Titan plans to issue 7 billion new shares for HK$175 million ($22.57 million) to the oil trader, Titan said in a filing with the Hong Kong bourse on Wednesday.
Zhenrong will seek to keep Titan listed by maintaining the company’s public float at no less than 25 percent of its total share capital, Titan said, adding that the share issue would be subject to a number of conditions, including a dismissal of Warburg’s liquidation suit.
Zhenrong has also agreed to pay up to $145 million to buy Warburg Pincus’ interest in Titan’s storage companies in mainland China and to provide the storage companies with interim financing of up to $40 million.
An acquisition would allow Zhenrong to make use of Titan’s oil storage facilities in Guangdong, Fujian, Shanghai and Shandong in eastern China, a Guangdong Zhenrong official has said.
