China Coal bed methane (08270.HK) announced that Guangxi Lianfu Business Services and Sun Guilan, a wholly-owned subsidiary of the company, entered into a sale and purchase agreement with the buyer Guangxi Tongzhou Holdings to sell a 100% stake in Guangxi Beiliu Gas, the target company, for a cash consideration of 80 million yuan (the same below). Upon completion, the Group will no longer hold any interest in the target company.
The target company is mainly engaged in selling pipeline natural gas and providing gas supply connection services in Beiliu City, Guangxi Province, China.
The Group estimates that the proceeds from the sale will be about HK $90.222 million upon completion, and the net proceeds are expected to be about $51 million, of which about $40 million will be used for well drilling and pipeline construction works, and the balance of about $11 million will be used to repay the Group's liabilities and general working capital.