Sinoenergy Corp. (OTCBB: SNEN) announced its subsidiary, Qingdao Sinogas General Machinery, finalized a $17.87 million strategic investment from a group of Chinese investors. The compressed natural gas (CNG) vehicle and gas station equipment manufacturer also said it is reorganizing its group structure to differentiate its business segments by their functions.
Per the arrangement, the investors will acquire a 24.95 percent ownership of the company, while Sinoenergy will retain a 75.05 percent ownership. The investment will allow the subsidiary to operate as a domestic joint venture, increasing registered capital to $15.7 million from $11.8 million. The company also develops and operates CNG filling stations in the People’s Republic of China. Huang said part of the investment will go toward further development of the filling station business.
“Qingdao Sinogas will use part of the investment to establish a new production line for the fabrication of steel containers, a key component in CNG truck trailer manufacturing. By fabricating our own steel containers, we should be able to achieve impressive cost savings. We hope that working with our new strategic investors will lead to increased sales of pressure containers and fuel switching kits,” Bo Huang, CEO of Sinoenergy stated in the press release. “Moreover, under the joint venture structure, Sinogas may be able to take advantage of additional domestic financial resources to support our future business development, such as a listing on the PRC stock market.”
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