CN Energy Group Announces Acquisition of Oil Trading Firm
CN Energy Group, a China-based energy company, announced it has entered into an agreement to acquire 100% of Blessing Logistics Ltd. Blessing Logistics is described as an oil trading company. The acquisition marks a strategic move by CN Energy to expand its business into the oil trading sector.
- The acquisition is valued at approximately $2.0 million, which will be paid to Blessing Logistics shareholders through the issuance of CN Energy's Class A ordinary shares. - Prior to this move, CN Energy's core business was manufacturing wood-based activated carbon used in industries like pharmaceuticals and water purification, as well as producing biomass electricity. - Blessing Logistics, founded in 2015, is based in Alberta, Canada, and holds a Canadian crude oil export license. The company is also a qualified trader within the China National Petroleum Corporation (CNPC) system. - This acquisition is a strategic pivot for CN Energy, providing it with a North American platform to enter the energy trading market and pursue upstream investment opportunities. - The move comes as CN Energy faces financial headwinds, including a net loss of approximately $5.6 million in fiscal year 2023 and a recent delisting warning from Nasdaq for its stock price falling below the minimum bid price. - For the fiscal year ending September 30, 2023, CN Energy reported a 44% increase in revenue to $57.90 million, driven by a 39.2% rise in activated carbon sales volume. - The agreement includes a 60-day period for the parties to negotiate a definitive share purchase agreement, after which either party can terminate the framework deal. - CN Energy has stated that its work promoting activated carbon for oilfield-related applications helped the company identify the potential value in oil and energy trading opportunities.
