Zhenrong Energy makes offer for Warburg-invested Titan

Zhenrong, part of state-owned Zhuhai Zhenrong, one of China's biggest oil traders, would also provide up to HK$320 million in interim financing and offer HK$1.13 billion for Warburg's interests in the company. The latter is conditional on the liquidation proceedings being withdrawn or dismissed.

Zhenrong, which also wants a waiver exempting it from making a general offer for all of Titan, is interested in using the company's storage facilities in Guangzhou, Fujian and Quanzhou. The interim financing would take the form of advance payments over a period of six months for the lease and management of these businesses.

Titan reported an annual net loss of HK$783.3 million for the most recent fiscal year and its shares were suspended from trading on June 19 after falling 50% over the previous 12 months, cutting the company's market value to HK$1.92 billion. The company hasn't turned a profit in five years and assets exceeded liabilities by HK$1.24 billion at the end of last year.

Warburg has invested more than $215 million in Titan since 2007 and currently holds a stake of around 10%. In the last month, vehicles controlled by the private equity firm have sought to exercise redemption rights on shares and convertible notes collectively worth more than HK$2 billion in Titan entities. They subsequently requested the entities be wound up.

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• Topics
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• Credit/Special Situations
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• Warburg Pincus Asia