Last checked at 19 Feb 2009 15:09
19 February 2009
GREEN DRAGON GAS LTD.
("Green Dragon" or the "Company")
SHAREHOLDER OFFER
AND GOLDMAN SACHS APPOINTMENT
Green Dragon Gas Ltd. (AIM:GDG), the Chinese Coal Bed Methane business, today announces an offer of new ordinary shares in the Company (the "Shareholder Offer") to all shareholders on the Company's register as at the close of business on 23 February 2009 (other than those resident in jurisdictions in which such an offer would be in breach of any legal or regulatory requirement). Each such shareholder as of this date will be entitled to subscribe in cash for new ordinary shares in the Company at a price of US$3.68 per share up to a maximum amount of US$3 million per shareholder. The Shareholder Offer will open on 23 February 2009 and close on 27 February 2009 and is subject to an overall aggregate maximum of US$25 million.
Randeep Grewal, the Chairman of GDG, will subscribe the maximum permissible amount of US$3 million pursuant to the Shareholder Offer.
The Company has engaged Netherland Sewell & Associates Inc to produce an updated evaluation of its Coal Bed Methane resources as of 31 December 2008 and the results of this evaluation will be announced prior to month end.
The Company has appointed Goldman Sachs to assist the Board in evaluating strategic alternatives to the funding of the Company's development plans in addition to a possible listing on the Hong Kong Stock Exchange. Whilst the latter is subject to market conditions, corporate interest in Coal Bed Methane businesses is currently manifesting itself in competitive bidding situations in Australia. In view of the undeterred domestic gas demand in China and, notwithstanding the global credit concerns, Green Dragon is evaluating all options to continue its growth trajectory.
The proceeds of the Shareholder Offer will be used in the development of the Company's business plan and for working capital purposes including the forthcoming repayment of the balance of a convertible bond.
A subscription agreement will be sent to the Company's shareholders and a copy will be available on the Company's website. The subscription agreement should be completed and returned to the Company in accordance with the instructions thereon by shareholders wishing to subscribe pursuant to the Shareholder Offer.
Commenting on the Shareholder Offer, Randeep S. Grewal, the Company's Chairman and CEO, said:
"The imminent release of our updated year end 2008 Netherland Sewell report is expected to show the Company's continued successes. We believe the significance and accretive value of our proprietary horizontal SIS drilling technology will act as a catalyst for us and for the CBM industry in China. The Company has decided to offer its shareholders the opportunity to subscribe to an offer of new shares in which I myself will be participating. Green Dragon intends to benefit all stakeholders from the confluence of the Company's longevity in the business to date, its technologies and China's very significant domestic gas demand".
For further information on the Company and its activities, please refer to the website at www.greendragongas.com or contact:
Randeep S. Grewal / Betty Cheung,
Green Dragon Gas, +852 3710 0168
Dr Azhic Basirov / David Jones,
Nomad & Broker, Smith &Williamson, +44 20 7131 4000
Tim Redfern,
Broker, Evolution Securities, +44 20 7071 4300
Tim Thompson / Christian Goodbody,
Investor Relations, Buchanan, +44 20 7466 5000