GEMS invests $20m in East China Sea energy player

The bonds will be issued in two tranches of $10 million each, to be drawn no later than July and December of this year. The term is three years, extendable for two one-year periods, and the coupon is 7% per annum, of which 4.5% will be paid in cash and the rest in shares. The conversion price is C$0.70 for the first tranche and C$0.85 for the second tranche.

Toronto-listed PEH will use the proceeds to acquire an affiliate company, Primeline Petroleum Corp. (PPC), enlarge its asset base and simplify its corporate structure, according to a statement.

PPC has minority contractor's interests in a gas field and a petroleum block in the East China Sea. By acquiring PPC, PEH will gain full exploration rights to the block and a 49% interest in the gas field. CNOOC has the majority stake and acts as operator for field development and production.

PPC was set up by the Hwang family in 1993, with PEH established two years later as a listing vehicle. Victor Hwang, president, chairman and major shareholder of PEH is also the owner of PPC. The GEMS transaction will provide PEH with sufficient capital to buy Hwang's interest in PPC.

The gas field came on stream in July 2014 and there are plans to set up supply arrangements with Zhejiang province. The field is located 110 kilometers off the coast of Zhejiang, not far from the city of Wenzhou. Meanwhile, the petroleum block has been surveyed and the first exploration wells are expected to be drilled later this year.

GEMS was set up in 1998 and has managed more than $850 million in capital commitments. Its current oil and gas interests span Australia, Central Asia and China.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Industrials
• Greater China
• PIPEs
• PIPE
• GEMS
• Commodities
• energy
• China