OREANDA-NEWS. May 23, 2011. Green Dragon Gas, one of the largest independent companies involved in the production of CBM gas and the distribution and sale of wholesale gas in China, has announced that it has acquired Pingdingshan Sinoenergy Gas (PSG).

It has concurrently been repaid its investment in Sinoenergy Corporation having elected not to proceed with this acquisition.

A proposed investment of USD 34.7m. in Sinoenergy was announced in October last year and required the completion of a corporate reorganisation of Sinoenergy prior to completion.

However, this failed to happen and Green Dragon elected to divest its interest. Under the terms of the divestment Green Dragon has been repaid a total of USD 37.9m. (including USD 28m. in interest), representing a 13% return (annualised) on capital.

As part of this transaction, Green Dragon has acquired PSG, a subsidiary of Sinoenergy, which owns and operates two CNG retail stations strategically located in Henan. These CNG retail stations synergistically get their gas supply from Green Dragon's Midstream Distribution station in Zhengzhou.

Randeep Grewal, Chairman, CEO and Founder of Green Dragon, commented: "We were clear with Sinoenergy on the required reorganisation of the corporate entity to give us comfort in converting the investment into an equity relationship which was not accomplished timely as required.

"The Company has been repaid in full plus interest with a 13% return and acquired the CNG stations in Henan which are synergistic to our own gas production. We are very pleased with this outcome and wish Sinoenergy continued success in their business".