Yangzijiang inks deal for 30% stake in new Chinese LNG joint venture

MAINBOARD-LISTED Yangzijiang Shipbuilding (Holdings) has inked a deal to set up a liquefied natural gas (LNG) supply chain joint venture, the board said on Thursday.

Its wholly-owned Yangzijiang Terminals China Holding subsidiary will cough up six million yuan (S$1.23 million) for a 30 per cent stake in the three-way joint venture.

The board said that the transaction is in the long-term interest of the group, as it will offer an initial exposure to a wider range of LNG-related business.

Joint-venture company Jiangsu Run Yuan Energy Co will build LNG storage facilities, undertake trade in natural gas and carry out businesses in other parts of the LNG supply chain, said the bourse filing.

Wuxi China Resources Gas Co, a subsidiary of Chinese state-owned gas utilities group China Resources (Holdings) Co, will own a majority stake of 51 per cent.

Still, the deal is considered an interested-person transaction as one of Yangzijiang's partners, which will hold a 19 per cent interest in the joint venture, is 41 per cent-owned by the honorary chairman and executive chairman of Yangzijiang.

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The establishment of the joint venture company will be funded internally and is not expected to materially affect Yangzijiang's earnings per share or net tangible assets for the year to Dec 31, 2021, the board added.

Yangzijiang shed S$0.02, or 1.84 per cent, to S$1.07 on Thursday, before the news.