Baring Private Equity Asia, an Asian private equity firm, has invested $88 million (€57.1 million) in the buyout of methane producer Asian American Gas, together with Chengwei Ventures, a Shanghai-based venture capital firm. This investment makes Baring Asia the single largest minority shareholder in the company.
Baring Asia led the co-investment, contributing about $74 million, with the remainder coming from Chengwei Ventures, according to Gordon Shaw, managing director for Baring Asia’s operations in China. This is not the first association between Baring Asia and Chengwei Ventures and they have been co-investors in other deals.
Steve Zou, the chief executive and founder of Asian American Gas, has also been appointed the chairman and president of China CBM Investment Holdings, the special purpose vehicle that was created for the buyout.
Jean Eric Salata, chief executive of Baring Asia, said in a statement that investment in coal bed methane and related industries had been limited in China, and the country’s resources have so far remained underdeveloped. The investment will be used by China CBM to accelerate the development of coal bed methane as a clean energy resource.
He said: “By investing in coal bed methane development, AAGI is also helping to avoid coal mine accidents and reduce methane emissions, a major source of greenhouse gases.”
The investment in China CBM Investment Holdings was made from Baring Asia’s fourth fund, the target size for which is $1.5 billion. The firm has invested more than $200 million from this fund in six deals in India, Japan and China.