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May 16, 2022

China’s CEFC, KMG International’s majority shareholder

+ China‘s CEFC will pay USD 680 M for KMGI (former Rompetrol Group) shares and will commit to investing at least USD 3 bln over the next five years


China Energy Company Limited (CEFC) has bought KMG International’s (former Rompetrol Group NV) majority shares package. KMG and CEFC’s participation in the new joint venture will be 49 and 51 percent respectively. The paperwork for the setting up of the joint venture was signed last Friday, the Chinese company becoming majority shareholder.

The details of this important transaction were presented in a communiqué released by KazMunayGas S.A.: Kazakhstan’s national oil and gas company – KazMunayGas (KMG) – and China Energy Company Limited (CEFC) have signed today the documents for the setting up of a joint-venture. KMG and CEFC’s participation in the new joint-venture will be 49 and 51 percent respectively. According to the agreement reached, the Chinese company takes on a series of obligations, through which it will carry out investments to develop new projects in the European Union and in countries adjacent to the Silk Road. Under the name “Silk Way,” KMG and CEFC’s joint project will develop on the basis of KMGI Group’s platform. A mixed working team consisting of experts from Kazakhstan, China and Romania has carried out an important volume of preparatory activities – the signing, on 14 December 2015, of the Memorandum of Understanding, in the presence of ministers from Kazakhstan and China, and the signatories’ validation of the term sheet on 29 January 2016.

“I am convinced that in partnership with a strong investor, the company will manage to progress considerably, using KMGI as a joint platform for developing the business,” KMG President Sauat Mynbayev stated. CEFC Executive Director Jianjun Zang emphasised: “The partnership between CEFC and KMG has as objective a strategic development that will make KMG International a join platform for obtaining resources and carrying out strategic investments. This development is part of the spirit of the two national initiatives – One Belt One Road and Nurly Zhol. We are confident it will be a beneficial collaboration in order to develop a long term strategic partnership.”

In line with what the two parties established, the mixed company will be managed on the basis of parity. The transaction will be subjected to preliminary measures that also entail final approval from competent European and Chinese authorities and from other institutions too. The estimated date for its completion is October 2016.

China’s CEFC is one of the most dynamic private companies in China. In 2014, it was inducted in Global Fortune 500, on the 349th place. CEFC is active in the energy, financial and investments domains. KMG International (former Rompetrol Group NV) was taken over by KMG in 2007. In Romania, the Group controls two refineries, while at European level and in the Black Sea region it controls and operates an important fuel distribution network.

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