Hong Kong-listed Titan Petrochemicals Group Ltd has announced strategic funding through its subsidiary China StorageCo to support its China onshore storage expansion plans.
The downstream logistics oil firm intends to use the proceeds of the China StorageCo Notes of up to HK$312.6 million ($40.1 million) to fund the expansion of China StorageCo's oil terminals in China.
The oil terminals are to be expanded to approximately 2.6 million cubic metres (m³) from about 1.1 million m³ as at December 31, 2008.
Titan Oil Storage Investment Limited (TOSIL), a wholly owned subsidiary of Titan, and investment firm Warburg Pincus are supporting the funding through the subscription of China StorageCo Notes.
Warburg Pincus has exercised its option on July 14 to subscribe for China StorageCo Notes in amount of HK$156 million ($20 million).
TOSIL intends to subscribe the Notes in amount of HK$156.6 million ($20.1 million) before the expiry of the option ''on the first anniversary of the issue of China StorageCo Notes to Warburg Pincus.''
Titan owns 50.1% of China StorageCo while the remaining 49.9% stake is owned by Warburg Pincus.
Construction of onshore storage facilities in which Titan has invested began in 2006.
China StorageCo's oil terminal operations now cover Nansha (in Guangdong Province), Quanzhou (in Fujian Province) and Yangshan (near Shanghai).
The first of three phases of developments in all these facilities have been completed, bringing the total onshore storage capacity of these various facilities to about 1.1 million m³ by December 31, 2008.
''The aim is for the group to become the largest independent commercial oil and petrochemical storage operator in China,'' Titan said in a latest statement.