China's Hony in $350m Santos stake acquisition

Beijing-based Hony Capital is buying an additional 6.5% stake in Santos for A$500m as part of the Australian oil and gas producer's broader efforts to shore up its balance sheet.

Hony Capital, the Beijing-based private equity firm backed by financial-to-computer conglomerate Legend, has agreed to increase its minority stake in indebted Australian oil and gas producer Santos for A$500 million $352.8 million.

In a filing with the Australian stock exchange, Santos said on Monday that Hony will subscribe to 73.53 million of its shares at A$6.8 per share to help cut the company's debt and shore up its balance sheet.

The price paid by Hony, which also agreed not to divest its shares for 12 months, represents a 15% premium to Santos's closing share price on Friday of A$5.91.

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