Quick Take: Foxconn to Buy Stake in Small Oil Producer
Apple Inc.’s major supplier Foxconn Technology Co. Ltd. has agreed to acquire a 24.37% stake in a Hong Kong-listed crude oil producer for HK$1.49 billion ($190 million).
IDG Energy Investment Group Ltd., which had operated hotels and restaurants until July 2016, became an energy company after Titan Gas Technology Investment Ltd. injected upstream crude oil assets in a reverse takeover. IDG is currently exploring crude oil in Inner Mongolia, and has announced a plan to acquire a shale-gas basin in the U.S.
IDG said in a statement dated Wednesday that five units under Foxconn Technology have agreed to subscribe to a total of 1.49 billion IDG shares at HK$1 per share.
IDG said its business development and operation “will benefit from Foxconn Technology’s global network, customer resources, public relationship as well as its leading experience of operational excellence.”
Also, the share sale will “provide (IDG) with immediate funding and the shareholders’ base of the company will be broadened,” the statement added.
Foxconn will become IDG’s second-largest shareholder after Titan should the deal complete.
It is not clear why Foxconn would invest in a hydrocarbon producer. Foxconn could not be reached for comment.
The deal will need IDG’s shareholder approval to be final.
Contact reporter Aries Poon (email@example.com)
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