CEFC China Signs KMGI Share Transfer Agreement with KMGCEFC China
At 4 pm of December 15, 2016 (local time), CEFC China and the National Company “KazMunayGas” (KMG) held a signing ceremony for the agreement on KazMunayGas International N.V. (KMGI)’s share transfer in Bucharest, capital of Romania. According to the agreement, CEFC China will own 51% shares of KMGI and KMG the other 49%.
The agreement entered into force upon signature, expecting the completion of the transfer in the first half of 2017. On December 14, 2015, CEFC China and KMG signed a strategic cooperation agreement in the presence of Chinese Premier Li Keqiang and the then Kazakhstan Prime Minister Karim Massimov at the Great Hall of the People in Beijing, in which the share transfer structure was defined. On April 29, 2016, the two sides signed transfer-related documents in Astana.
KMGI, formerly The Rompetrol Group, was established in 1974 and privatized in 1993. It was registered in Amsterdam. From 2007 to 2009, KMG completed its acquisition of a 100% stake of The Rompetrol Group. In 2014, The Rompetrol Group was renamed to KMG International N.V. KMG is a major operator of oil and gas exploration, exploitation, processing and transportation in Kazakhstan, serving the nation’s interest in the oil and gas sector. Backed by KMG's upstream oil and gas resources and over 7000 employees, KMGI is currently engaged in oil processing, sales and trading in the international market. Its European retail network comprises over 1,100 gas stations, covering France, Spain, Romania, Georgia, Bulgaria, Moldova, etc; it has two advanced oil refineries; and it also has operations in explorations, oil industry services and drilling in EPC.
In the presence of Ye Jianming, Chairman of the Board of CEFC China, Daulet Batrashev, Ambassador of Kazakhstan to Romania, and Guan Gang, Counselor at the Economic and Commercial Office of the Embassy of P.R. China in Romania, CEFC China Executive Director Zang Jianjun and KMG Executive Vice President and Chairman of KMGI Daniyar Berlibayev signed the agreement on behalf of the two companies. Ye noted at the signing ceremony that KMGI is a veteran in the oil and gas industry who has secured rich operation and management experience and advanced technology and equipment. The two sides, during nearly two years’ negotiation, have united their development strategies and goals. After becoming KMGI’s controlling shareholder, CEFC China will take KMGI as a platform for M&A in the oil and gas industry to integrate the two companies’ upstream resources and financial advantages and expand the oil and gas retail market in Central and Eastern Europe, the Black Sea and the Mediterranean region, aiming to evolve into a comprehensive energy company with international competitiveness.
In recent years, CEFC China has been constantly expanding its investment in countries along the “Belt and Road”, including the Czech Republic, Georgia and the United Arab Emirates, and has been integrating industry and finance. It has now become the most influential Chinese enterprise with the largest investment in the Central and Eastern Europe. The successful transfer of KMGI’s share to CEFC China will be of great value for CEFC China to optimize its global energy network and further consolidate its development model of industry and finance integration. It is also of same crucial significance to Europe-Asia energy cooperation.
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