HONG KONG, Aug. 15, 2012 /PRNewswire-Asia/ — Titan Petrochemicals Group Limited (HK01192, ‘Titan’ for short hereinafter), a company known for usually keeping a low profile, has now become a hot topic as the battle for control continues. Titan, China‘s largest independent petrochemical logistics services provider, has already seen a big stake of its company purchased by Guangdong Zhenrong Energy Co., Ltd. (hereinafter referred to as ‘Guangdong Zhenrong’). Guangdong Zhenrong has entered into a share purchase agreement, and will become the largest shareholder, holding nearly 90% of Titan’s shares. However, another party, Titan’s original third-largest shareholder, Warburg Pincus & CO. (hereinafter ‘WP’ for short), would like to withdraw its previous investment in Titan’s petrochemical subsidiaries in China. WP then aims to wind up Titan and has taken its case to the Bermuda Court.

Titan reports that the focus of this battle is Titan’s ten-year investment in the southeast coast of China; China‘s largest independent petrochemical storage base, which has cost the Company billions of RMB to develop.

Titan was single-handedly founded by Mr. Tsoi Tin Chun, a Fujian native who is now a successful Singapore businessman. Titan has been operating Asia‘s largest professional crude oil transportation fleet, and in 2002, Mr. Tsoi began to plan the investment of constructing offshore petrochemical storage terminal facilities on the south coast of China. Industry peers couldn’t understand the move at that time, for fluctuations in international crude oil prices and the Chinese market that was suffering a lot due to the lack of storage facilities. But, people became to realize Tsoi’s move was far-reaching and well ahead of the game. Today, Titan has invested in four petrochemical storage terminal bases located in Nansha, Guangdong; Quanzhou Fujian; Yangshan Shanghai; and Yantai Shandong. 2.7 million cubic-meter tanks are in operation and it is expected to reach 8.5 million cubic meters in 2014. Titan desires to be the largest private petrochemical storage logistics services provider in China.

However, in order to achieve these ambitious goals, Titan also bears a heavy cross. The international crude oil transportation market remained in the doldrums, forcing Titan’s revenues to drop. And, the international financial crisis resulted in Titan’s financing channels to be blocked and the capital chain to tighten. As of 2011, although Titan’s storage business in China had begun to profit overall, it needed a strong partner to help complete its potential.

Guangdong Zhenrong does not appear incidentally. As one of the largest crude oil traders, Guangdong Zhenrong has been familiar with Titan for a long time. It raised a highly targeted acquisition program, and pushed it through rapidly, showing that it has firmly understood and has long been optimistic about Titan’s storage business development prospects. It seeks, through the acquisition, to own the four storage terminals on the southeast coast in one stroke. Though Titan may not sell the controlling stake to the highest bidder, where there is life, there is hope. This will help to make the storage operation and construction continue its healthy development, which is the best choice for both the shareholders and the thousands of employees at this moment.

On the other hand, as a private equity fund, WP pays more attention to the return on investment. As long as it can quit securely, the Company believes it has no interest in Titan’s future. Thus, it is anxious to wind up Titan’s storage business. This logic and practice is understandable for some, but the fate of Titan, and the thousands of employees and their families, may see things differently.

SOURCE Titan Petrochemicals Group Limited