
PE firms exit US oil assets to Chinese property developer
Chinese real estate developer Yantai Xinchao Industry has acquired two oil assets in West Texas backed by US-based private equity firms ArcLight Capital Partners and Denham Capital.
The deal values the assets at RMB8.3 billion ($1.3 billion). In a disclosure to the Shanghai Stock Exchange, Yantai Xinchao identified the oil fields as Tall City Exploration and Plymouth Petroleum. ArcLight is an investor in the former while Denham has a stake in the latter.
The proposed acquisition has been approved by the Committee on Foreign Investment in the United States (CFIUS).
Yantai Xinchao, based in the coastal province of Shandong, reported revenue of about RMB1 billion last year, down from RMB2 billion in 2013. It made a net loss of RMB39 million, compared to a profit of RMB35 million in 2013. In addition to property development, the company has a smaller interest in electronics components.
Founded in 2001, Boston-based ArcLight targets midstream power and production assets. The GP has invested approximately $13 billion 91 transactions since inception. Denham focuses investments in oil and gas, power and mining.
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