China Resources Gas Group (formerly China Resources Logic Ltd) yesterday announced that the company has sold its cement business to its parent group China Resources (Holdings) for HK$293 million, after acquiring the segment with HK$217 million earlier this year.

The company's director and general manager, CD Wang, told reporters that the decision was made to raise capital for its newly-acquired natural gas business.

China Resources Gas (CRG) reached an agreement with its parent group to purchase seven mainland natural gas projects for HK$3.81 billion on Aug 8.

Between January and June, the company made a profit of HK$34.5 billion in cement business, while its revenue stood at HK$188 million.

Talking about the latest move, Wang pointed out that the restructuring could help the company shift its focus to the natural gas segment.

"In this difficult period, the sale of the (cement) segment enables us to capitalize on the gas industry," he said.

The company will continue to trim its non-core businesses to convert itself into a gas-orientated firm, he said.

"We've completed our disposal of semi-conductor businesses except the semi-conductor plant in Tai Po, but we don't have a timetable to sell the building, which is worth tens of millions of Hong Kong dollars."

When asked whether the parent group will further inject new gas projects to its listing arm, Wang said it depends on the market condition, adding that the company will speed up its acquisitions via placing or issuing new shares as the stock and capital market looks up.

However, the company and its parent group have reached a framework agreement that the former has the privilege to acquire matured gas projects in Sichuan.

The company's average capital expenditure for the seven gas projects is about HK$280 million.

Although the mainland's economy is feeling the heat of the US financial turmoil, the company's chairman, Ma Guoan, remained positive that the gas sector is able to maintain healthy growth and believed the company can meet its sales target. He also said that the company has no plan to lay off its employees.

The company also announced that its shares will be traded under the name of China Resources Gas on Dec 3.

(HK Edition 12/02/2008 page2)