[FOR IMMEDIATE RELEASE]
(Hong Kong, January 7, 2001) - Privately-owned piped gas distributor Xinao Gas Holdings Limited ('Xinao Gas' / 'the Group') (Stock code: 8149) today announced that it has successfully obtained the exclusive operation rights for piped natural gas in Taixing City in Jiangsu Province and Zhouping City in Shandong Province, and has increased its equity interest in Beijing Xinao project to 95%.
A joint venture company, Taixing Xinao Gas Company Limited, has been set up by Xinao Gas and Taixing City Piped LPG Company, to supply piped gas to residents in Taixing City, Jiangsu Province for a period of 30 years. The total investment of the project amounts to USD1.6 million and the registered capital is USD1.2 million. Xinao Gas owns a 90% interest in the joint venture company, while the remaining 10% interest is owned by Taixing City Piped LPG Company.
In addition, Xinao Gas has been granted from the People's Government of Zhouping county in Shandong Province, both the exclusive operation rights for piped gas, as well as approval to establish Zhouping Xinao Gas Company Limited, a foreign-owned company, to develop and operate piped natural gas projects for a period of 30 years in the Zhouping county centre. The gas project in Zhouping county centre was originally operated by Zhouping Foundation Gas Company Limited. With the consent of the People's Government of Zhouping county in Shandong Province, Zhouping Foundation Gas Company Limited has ceased its business and its net assets have been acquired by Xinao Gas, through Xinao Shandong Investment Limited, at a consideration of RMB2.25 million.
Mr. Wang Yusuo, Chairman of Xinao Gas, said, "I am delighted that the Group has obtained two new gas projects in December last year, which make us to have additional six projects gained after our listing, marking a perfect milestone for our business development in 2001. The Taixing project is the third project in the Group's 'West to East Pipelines' downstream market business, which will further intensify the Group's presence in this market. Additionally, with the new Zhouping project, our gas projects in Shandong Province have reached a total number of seven. Both developments exhibit the accelerating growth of the Group's business."
Taixing is located in Taizhou City, approximately 25km southeast of Yangzhou city in Jiangsu Province. Taixing's domestic productivity value is ranked first in Taizhou City. At the end of 2000, its total population consisted of approximately 171,000 people in 55,000 households. Zhouping county is located in the centre of Shandong Province and is approximately 60km northeast of Jinan City. The county centre consists of a total population of 120,000 with approximately 40,000 households.
Mr. Wang continued, "In addition to the two new projects, the Group has increased its shareholding in Beijing Xinao Gas Company from 80% to 95%. The Miyun Foreign Economic Affairs Committee has approved the transfer of 15% shares in Beijing Xinao Gas Company from Beijing City Miyun Chemicals Company to Xinao Miyun Investment Limited, a Group subsidiary at a consideration of RMB 1.39 million. The increased shareholding will result in a larger profit-sharing for the Group, benefiting the Group with more profits."
Mr. Wang concluded, "Looking ahead, apart from continuing the discussions with the local governments in areas of the 'West to East Pipelines' projects. We will aggressively strengthen the gas penetration rate of existing projects. As the consumption volumes of industrial users are much higher than household, the Group will implement tailor-made marketing policies to industrial users. With these development plans and the Group's strong resources, we have confidence in the Group's business development and performance in the coming year."
Recently, Xinao Gas received AsiaMoney's award as a "Best Small Company" and one of the "Overall Best Managed Company 2001" in China. Additionally, Finance Asia presented the Group with the "Best Small Cap IPO" award. These three awards illustrate the wide recognition of the Group enjoys among investors and further strengthen the leading position of the Group 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 is operated in 15 regions including Anhui Province, Beijing City, Heibei Province, Jiangzu province, Liaoning Province and Shandong Province.
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