[For Immediate Release]
(Hong Kong, 18 October 2001) - Xinao Gas Holding Limited ("Xinao Gas" or "The Group")(Stock Code: 8149), the non state-owned gas distributor, today announced that it has entered into an agreement with Bengbu City Construction Investment Limited to set up a joint venture, Bengbu Xinao Gas Company Limited, on 15 October 2001. The new company will engage in the provision of piped gas to the Bengbu city centre, Anhui Province, the PRC. This project has an operational period of 30 years.
The total investment for the new project is RMB330 million and the registered capital is RMB110 million. Xinao Gas will own 70% interest in the joint venture, while the remaining 30% interest will be owned by Bengbu City Construction Investment Limited. The new company will engage in the investment in, and operation and management of the gas pipeline infrastructure and the sale and distribution of piped gas in Bengbu City. It will also engage in the sale of gas appliances and equipment, as well as the provision of repair and maintenance services.
Mr. Wang Yusuo, Chairman and Executive Director of Xinao Gas, said, "We are delighted to have the opportunity to set up a joint venture in Bengbu City to provide piped gas to local residents. This is the Group's first project in response to the construction of the West to East Pipelines and represents an important milestone in the Group's business development."
The Bengbu city center which has an area of 445 square kilometers is located in the northern part of Anhui Province and is approximately 120 kilometers north of Hefei. It is an important industrial and commercial city in the Province. Bengbu City has a population of approximately 750,000 consisting of approximately 220,000 residential households in 1999 and 1,258 industrial enterprises at present.
Mr. Wang continued, "The local city government of Bengbu has indicated that they will provide significant support to the project. After completion of the construction of the gas pipelines infrastructure, the designed daily capacity will be approximately 630,000 cubic meters. The Bengbu project is the largest project for the Group to date. We believe this new project will contribute attractive returns to Xinao Gas."
Mr. Wang concluded, "Leveraging on the competitive advantages as a first mover in the industry, with a proven track record, well-established reputation and an experienced and capable management team, the Group will continue to negotiate with local governments at locations along or near the West to East Pipelines with a view to developing and operating piped gas businesses in these areas and to further boost the growth of the Group."
The Group was recently selected by Forbes Global as one of the 200 best small companies in the World in 2001. This award recognises the Group's steady business growth and able management, as well as its leading position in the industry.
ABOUT XINAO GAS HOLDINGS LIMITED
Xinao Gas is mainly engaged in the investment in, and the operation and management of, gas pipeline infrastructure and the sale and distribution of piped gas. The Group's other business activities include the sale of gas appliances and equipment, as well as the provision of repair and maintenance services. Currently, the Group's business has expanded from Langfang City in Hebei Province to Liaocheng, Zhucheng, Yantai Economic and Technical Development Zone, and Huangdao and Chengyang of Qingdao City which are located in Shandong Province, Miyun, Pinggu and Changping in Beijing Municipality, Huludao in Liaoning Province and Bengbu City in Anhui Province, a total of eleven regions.
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