S&P: Panva Gas unchanged

Standard & Poor's said its ratings and outlook on Panva Gas Holdings Ltd. (BB+/positive), including the BB+ issue rating on the company's $50 million convertible bond due 2008 and $200 million notes due 2011, are unaffected by the company's recent announcement that it will raise Hong Kong dollar 703 million through a share offering.

The majority shareholders, Hong Kong & China Gas (China) Ltd. (Towngas), Supreme All Investments Ltd. and Kenson Investment Ltd., will subscribe to maintain its existing ownership, the agency said, noting that the proceeds from the share offering will be used to reduce debt and for general working capital purposes.

Panva has made several positive developments in recent months to increase ties with Towngas, including a proposed share offering, a proposed $25 million shareholder loan advancement from Towngas and a proposed name change to "Towngas China Company Ltd.," S&P said, adding that this has been offset by the company's weaker than expected 2006 operating performance, however, mainly caused by slowing revenue growth, increasing distribution, selling and administration costs and fair-value loss from two interest rate swaps.

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