China Natural sale of equity interests to secured noteholder allowed

By Kali Hays

New York, Dec. 19 – China Natural Gas, Inc. Chapter 7 trustee Alan Nisselson obtained approval to sell the company’s equity interests in Shaanxi Xilan Natural Gas Equipment Co., Ltd. to stalking horse bidder Abax Nai Xin A Ltd. and Abax Lotus Ltd., according to a Dec. 18 order from the U.S. Bankruptcy Court for the Southern District of New York.

As previously reported, the trustee sought approval of the sale to Abax after the company received no other qualified offers for the assets by the Dec. 11 bid deadline.

Abax’s stalking horse bid includes a cash component of $250,000 plus an agreement to reduce the total amount of outstanding obligations owed to Abax by China Natural by $53 million.

The Abax parties are holders of senior secured notes totaling about $57.44 million.

Based in Xi’an, China, China Natural Gas is a provider of pipeline natural gas for industrial, commercial and residential use and compressed natural gas for vehicular fuel. The Chapter 11 case was filed on Feb. 8, 2013 under case number 13-10419.

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