Trading Statement

RNS Number : 3108K

Green Dragon Gas Ltd

13 July 2011

 



13 July 2011

GREEN DRAGON GAS LTD

("Green Dragon Gas" or "the Company")

Share Price Movement and Trading and Corporate Update

Green Dragon Gas, one of the largest independent companies involved in the production of CBM gas and the distribution and sale of wholesale gas in China, has noted the recent fall in the Company's share price and is pleased to provide the following trading and corporate update:

·    The Company's on-going operations and gas production targets are on schedule.

·    The Company's six Production Sharing Contracts ("PSC's") are in full force and effect with the required licenses. The operations continue at all six PSC's as planned.

·    The Company is well funded with over US$150 million in cash on hand at 30 June 2011.

·    The Company continues with its HK listing process as previously announced.

·    The Board of Directors has approved a share buy-back program of US$5 million.

·    Directors have purchased shares within the last month.

·    The issuance of 562,500 new shares from the convertible bond at US$8 per share announced on 15 June 2011 coincides with the share price drop.

·    Total shares traded since 15 June 2011 is 670,825 shares for a value of US$6.4 million. This has resulted in a drop of over US$600 million in the Company's market capitalisation.

In view of the continued corporate and operational successes and with the Company's business plan, the Company is unaware of any reasons for the drop in the share price over the last thirty calendar days. The Company is however aware of erroneous rumours and factually incorrect information being dissipated by certain organisations which may materially have misled the market and some of the shareholders. Some of these organisations have been served with legal notices while the others are being evaluated.

Mr. Randeep S. Grewal, Chairman& CEO, commented:

"As a Western Company operating in China we continue to pursue our goal of a dual listing in Hong Kong, a logical move to bring us closer to our home base of China. We are hopeful that such a main board listing will reduce the volatility in the stock due to the expected materially higher liquidity. The Hong Kong listing remains on track with our advisors, namely Macquarie and CLSA, committed to accomplishing this within the original time frame. If the recent weakness in equity markets continues, we believe we could accomplish this as an introduction without a capital raise as we will definitely not take any dilution at the current share price.

It is quite disturbing that the material drop in the share price is potentially a result of erroneous rumours by a select group of organisations. We are evaluating the pursuance of pertinent claims against such organisations.

In response to the drop in the share price coupled with the surplus cash on hand, the Board has authorized a Share Buy Back program. While a high growth company is expected to use its cash resources to maintain its growth, we feel the return on capital deployed in the limited share re-purchase at the current prices is in shareholders' best interests."

For further information on the Company and its activities, please refer to the website at www.greendragongas.com or contact:

Stephen Hill Green Dragon Gas	[phone]
Dr Azhic Basirov / David Jones Smith &Williamson - Nomad & Broker	[phone]
Tim Redfern / Anu Tayal / Adam James Evolution Securities - Broker	[phone]
Paul Connolly / John Dwyer / Steve Baldwin Macquarie Capital (Europe) - Broker	[phone]
Judith Rawnsley CLSA - Broker	[phone]
James Henderson / Phillip Dennis Pelham Bell Pottinger - Investor Relations	[phone]
Robyn Joseph Kreab Gavin Anderson - Public Relations	[phone]

 

END

 

 

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