April 3, 2012 / 10:05 AM / 7 years ago

Temasek, RRJ buy half of PetroChina unit's $1.3 billion offer

HONG KONG (Reuters) - Singapore state investor Temasek Holdings and private equity firm RRJ Capital bought nearly half of the shares in the $1.34 billion offering by PetroChina Co’s unit Kunlun Energy Co Ltd, two sources with direct knowledge of the deal said on Tuesday.

Temasek TEM.UL and RRJ, founded by Malaysia-born dealmaker Richard Ong, snapped up $600 million worth of shares in the deal, said the sources, who were not authorized to speak publicly on the matter.

More than 140 investors bought into the company, which is becoming a leading player in China’s natural gas sector, according to a term sheet of the placement seen by Reuters.

In recent years, Chinese oil companies such as PetroChina have been aggressive in bidding for energy reserves around the world as Beijing puts more emphasis on future supply security. But global energy companies are also looking to exploit China’s own oil and gas resources with an eye on its surging fuel demand.

Recent breakthroughs in gas technology mean natural gas is now a cheaper alternative to diesel fuel, and RRJ and Temasek are continuing to back the trend with their new investment.

The offering of 800 million new shares (0135.HK) was priced at HK$13.10 each, near the bottom of an indicative range and equivalent to a 7.6 percent discount to Monday’s close, the company said in a filing.

The stock closed 3.1 percent lower on Tuesday at HK$13.76, while shares of PetroChina (0857.HK)(601857.SS), Asia’s largest oil and gas producer, ended 1.6 percent higher.

The deal was launched with an indicative price range of HK$13 to HK$13.50, Thomson Reuters publication IFR reported late on Monday.

Kunlun plans to use proceeds from the offering to fund potential acquisitions and develop its liquefied natural gas (LNG) business.

Last year, the pair invested in Nasdaq-listed Clean Energy Fuels Corp (CLNE.O), a U.S. company focused on providing natural gas fuel for the transport sector.

RRJ’s clean energy investments, as well as others in hydraulic fracturing technology and even baby diapers in China, mean the firm has burned through around 60 percent of a $2.3 billion first fund in little over a year, according to one of the sources.

The private equity fund is already planning to raise a new $5 billion fund starting in the second half of the year, the source added, which would make it one of the most influential investors in the Asia region.

Bank of America Merrill Lynch (BAC.N), China International Capital Corp (CICC), Citigroup Inc (C.N), Deutsche Bank AG (DBKGn.DE), Morgan Stanley (MS.N) and UBS AG UBSN.VX were hired to handle the Kunlun offering.

($1 = 7.765 Hong Kong Dollars)

Reporting by Elzio Barreto and Stephen Aldred; Additional reporting by Farah Master; Editing by Chris Lewis & Kim Coghill

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