SGP TO SNAP UP COGEL FROM CHEVRON CHINA

       Siam Gas and Petrochemicals (SGP) has signed a deal for 99-per-cent ownership of Chinesebased Chevron Ocean Gas & Energy (Cogel) from Chevron China for BT1.7 billion.
       The move is part of efforts to enhance its business and expand its sources of revenue.
       In a filing yesterday with the Stock Exchange of Thailand, SGP said its board on September 17 passed a resolution approving the purchase by SGP's wholly owned Siamgas HK subsidiary.
       SGP assigned managing director Supachai Weeraborwornpong to sign the agreement with Chevron China on behalf of Siamgas HK and SGP, which he did on Tuesday.
       APPROVAL NEEDED
       Completion of the transaction is subject to certain conditions, including approval by the Chinese authorities.
       Supachai said the share acquisition would be completed next year.
       SGP will use its working capital to pay for the shares. It will loan Bt350 million to Siamgas HK, while Siamgas KH will increase its capital by selling shares to SGP to raise the remaining Bt1.35 billion neede to buy the shares.
       SGP meanwhile will use its own cash flow and retained earnings totalling Bt1.9 billion to buy capital-increase shares in Siamgas HK.
       Supachai said taking over Cogel would help boost SGP's gas sales by an additional 480,000 tonnes a year from the normal 1 million tonnes now and that the company expected to break even on the deal within six years.
       The takeover will also facilitate its plan to expand further into the Southeast Asian and Chinese markets, he sid.
       He insisted the deal would not affect SGP's dividend payments.
       Cogel is a major supplier of liquefied petroleum gas (LPG) in China, which has policy of promoting LPG use.
       Supachai is confident Cogel will turn a profit under the SGP umbrella. He said Cogel had accumulated losses of Bt4.7 billion after Chevron China gradually reduced its investment in the company in a bid to move away from the LPG business.
       He said sGP was in no hurry to reverse Cogel's losses, given that they meant a waiver of Chinese corporate tax.
       He said despite the acquisition, SGP would not revise its revenue forecast for this year. It still targets growth of more than 15 per cent in both revenue and net profit on signs of economic recovery and rising gas demand.
       The company's net profit rose 30 per cent year on year in the first quarter and 5 per cent year on year in the second quarter.
       SGP closed at Bt8.40 yesterday, up 0.6 per cent from the day before.