SK E&S further increases stake in China Gas

HONG KONG (Yonhap) -- Korea's leading city gas provider SK E&S Co. has further increased its stake in China Gas Holdings Ltd. as part of ongoing efforts to expand its presence in China's city gas sector, a source said Sunday.

The company's stake in the Chinese natural gas service operator has risen to 9.61 percent from 7.8 percent, said the source familiar with the shares that are listed on the Hong Kong Stock Exchange.

SK E&S announced earlier this month it would eventually increase its original 5.9 percent-stake in China Gas Holdings by purchasing additional an 5 percent for 120 billion won (US$103 million).

If SK E&S continues to purchase as planned, SK Group's total holdings will rise to around 15 percent, solidifying its position as the single largest shareholder of the Chinese energy company.

Its affiliate SK Gas is known to also hold 4.49 percent.

SK Group, the third-largest conglomerate in South Korea, now holds 14.1 percent in the Chinese firm through its two units.

The market capitalization of China Gas has reached around HK$15.6 billion (US$2 billion), with 4.38 billion outstanding shares.

China Gas was reported last month to have rejected a US$2.2 billion cash bid from state energy giant China Petroleum & Chemical Corp. and Chinese gas distributor ENN Energy Holdings Ltd., saying the offer did not reflect the company's actual value.

China Petroleum & Chemical, which is also known as Sinopec, already holds a 4.56 percent stake.

China Gas is China's only Hong Kong-listed gas company with mainland Chinese government shareholding. Two senior executives of China Gas were arrested in February by the public security bureau in the southern Chinese city of Shenzhen for embezzlement.