(Yicai Global) April 12 -- Chinese energy firm Enn Ecological Holdings[SHA:600803] has abandoned its intention to acquire Toshiba's liquefied natural gas business in the US after five months of deliberation due to pending permits.
Enn Ecological's shareholders opposed the plan to buy Toshiba America LNG's equity, and the potential buyer was unable to secure a related approval from the Committee on Foreign Investment in the United States, the Hebei-province based company said in a statement yesterday.
Despite the setback, Enn Ecological deemed to still focus on acquiring more upstream natural gas resources at home and abroad. Dissolving the deal will not cause any additional fees to the company.
Enn Ecological released its original plan last November, which involved paying USD15 million in cash for the total equity of Toshiba America LNG. This involved taking charge of contracts that Toshiba's Japanese unit Traction Energy Storage System has, which would have paid Enn Ecological's overseas subsidiary USD821 million in contractual consideration.
LNG is a mix of methane and ethane that converts natural gas into liquid to improve the ease and safety of transport. China has been stepping up its efforts to adjust its energy mix by replacing coal with cleaner-burning LNG in recent years.
Enn Ecological would have expanded its business to an estimated over 2.3 million tons of LNG per year from the current 100,000 tons with the deal that involved a contract that spanned over two decades.
Enn Ecological's share price [SHA:600803] fell 1.16 percent to CNY11.95 (USD1.78) by lunch.
Editor: Emmi Laine