Sector News

Air Products confirms interest in acquiring Yingde Gases

January 10, 2017
Chemical Value Chain

Air Products has confirmed it has submitted a proposal letter to Yingde Gases Group outlining its interest in acquiring the Chinese industrial gas company. Yingde’s board will meet on 10 January to discuss the offer. Air Products says it does not intend to comment further at this time.

Yingde Gases says it is the largest industrial gas player in China, with 2015 revenue of 7.9 billion renminbi ($1.2 billion). Yingde’s current market cap is about $815 million with net debt of about $1.4 million, yielding an enterprise value of $2.2 billion, according to J.P.Morgan analysts. As of 30 June 2016, it had 69 gas supply facilities in operation and 11 facilities under development. Last year, Air Products’ revenue in China was about $1 billion, or about 11% market share, while Yingde’s China market share is approximately 14%.

Yingde’s board and management have been split by a dispute in recent months. The company last month revised a private placement deal with Beijing OriginWater Technology (Beijing), a water treatment firm, halving the number of shares involved in the placement. The revision came after allegations from former Yingde executives that OriginWater and Yingde chairman Zhao Xiangti were aiming to launch a hostile take over Yingde via upping OriginWater’s stake in the company.

Under the previous placement agreement, announced in November, Zhao and OriginWater together would have owned just over 30% of Yindge’s shares, triggering a mandatory offer to purchase all of the company’s shares under Hong Kong law. After the revised agreement closes, the two Zhao and OriginWater will own around 24% of Yindge’s shares.

Two former Yingde top executives, Zhongguo Sun, former chairman and CEO, and Trevor Strutt, former COO, raised concern about the share placement with Hong Kong regulators, alleging that Zhao and OriginWater were acting together to in an effort to obtain control of the company, an accusation that Yingde and Zhao have denied. Sun, Strutt, had proposed an special shareholder meeting to remove Zhao, OriginWater CFO He Yuanping, and three other directors from Yingde’s board. The two were suddenly ousted from Yindge last month due to “unsatisfactory performance,” in a move that Strutt described as “sinister or secretive” in local press reports. Strutt, Sun, and Zhao are all co-founders of Yingde.

Yingde said in a recent regulatory filing that the allegation is “groundless and does not have substance.” The company says the private placement is needed to raise capital repay a bank loan. In the filing, Yindge accused Sun and Strutt of attempting to “obtain a de facto control over the company” through the removal of Zhao, He and other directors at a special shareholder meeting. Yingde “is conducting an internal financial and business investigation” into Sun and Strutt’s performance in their roles at the company, it said.

Yingde will receive about HK$598 million ($77 million) under the revised private placement agreement, which carries a price of HK$3.20/share. The proceeds will be used to repay a bank loan, Yingde said.

By Jing Chen

Source: Chemical Week

comments closed

Related News

January 29, 2023

Dow and 3M cut thousands of jobs

Chemical Value Chain

3M and Dow have announced they are cutting thousands of roles from their global workforces in response to economic pressures. Dow has said it will cut 2,000 jobs across its global workforce (around 5%) in a bid to save US$1bn in 2023. The company says it will also cut costs by shutting down “select assets”, though it did not note where it would halt operations.

January 29, 2023

Sweden discovers Europe’s largest rare earths deposit

Chemical Value Chain

Sweden’s state mining firm has discovered what could be Europe’s largest rare earths deposit, and says it could help the bloc reduce its reliance on imports of minerals needed to manufacture clean technologies and meet climate targets.

January 29, 2023

Avantium to supply Henkel with plant-based FDCA

Chemical Value Chain

Henkel and Avantium have been partners since 2019, when Henkel joined the PEFerence consortium. This consortium of partners, coordinated by Avantium, aims to establish an innovative supply chain for FDCA and PEF (polyethylene furanoate).

How can we help you?

We're easy to reach