GREY:WFREF - Post by User
Post by
wilwalon Dec 31, 2015 4:59pm
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Post# 24423038
Why the buyer is NOT an SOE
Why the buyer is NOT an SOEOne SOE that is hunting for acquisitions in Canada is Yanchang Petroleum Group Co. They bought out Novus last year before the oil price collapse and sigalled their intention to expand their acquisitions.
The problem with Long Run for Yanchang is that while the cash requirement to acquire it would be quite low, the enterprise value puts the company subject to FIRA, and FIRA will definitely be very wary about approving an SOE so it is unlikely that Yanchang will attempt to buy anything with an enterprise value over $600 million. They will probably wait until the new rules of TPP are in place and they will start to go after larger firms when the new rules are $1.5 billion without review.
FIRA will be much more amenable to private capital coming from China, even welcomed into Canada at a time when the oilpatch is bleeding profusely.