HONG KONG, July 18 Debt-laden Titan
Petrochemicals Group Ltd, facing a lawsuit seeking its
liquidation from U.S. private equity firm Warburg Pincus, said
it has received a proposal from a Chinese oil trader to take
control of the shipping and oil storage firm.
Titan, which said last week it was in talks to sell a
controlling stake, has suffered losses for five consecutive
years after its debt-driven growth strategy came undone during a
sharp downturn in the shipping industry.
Under the proposal, state-owned Guangdong Zhenrong Energy Co
would pay up to HK$200 million ($25 million) to subscribe for
new shares representing not less than 51 percent of the enlarged
share capital of Titan, Titan said in a filing with the Hong
Kong stock exchange.
In addition, Zhenrong would set aside HK$1.13 billion in
preparation to buy Warburg Pincus' interest in Titan, and also
provide Titan with financing of up to $40 million.
"This proposed investment will create a stable platform from
which Titan can ride out the current turbulent market conditions
and develop its business," Titan executive director Patrick Wong
said in the statement.
Guangdong Zhenrong is controlled by state-owned Zhuhai
Zhenrong Co -- formerly an affiliate of China's defence industry
and now one of the country's five biggest traders of crude oil
and oil products.
Warburg Pincus filed a petition in a Bermuda court earlier
this month seeking to wind up Titan, whose assets totalled
HK$6.4 billion ($825 million) as of the end of last year while
current liabilities reached HK$7.7 billion.
The private equity firm has invested more than $215 million
in Titan since 2007 and holds a stake of around 10 percent.
Shares in Titan, which has a market value of $248 million,
were suspended on June 19 pending an announcement of
price-sensitive information. The stock last traded at HK$0.246,
after plunging 50 percent in the last 12 months.