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China's Hony Capital ups Santos stake

AAP logoAAP 10/11/2016 Peter Trute

Chinese private equity firm Hony Capital has paid $159 million to increase its stake in Santos, eight months after selling a major shareholding in the Australian oil and gas player to another Chinese firm.

Santos has confirmed to the Australian stock exchange that Hony Capital bought 40 million shares - equal to 2.25 per cent of Santos's issued capital - after the close of market on Thursday, taking the Chinese group's stake to 3.2 per cent.

Hony Capital paid $3.98 a share - an 11 per cent premium to Thursday's closing price - and Santos shares were up 23.5 cents, or 6.6 per cent, to $3.815 at 1200 AEDT on Friday.

Santos made a $500 million private placement to Hony in November 2015 as part of $3.5 bilion in capital raising initiatives.

In March this year Hony sold its 11.7 per cent stake in Santos to ENN Group - a major Chinese gas distribution company.

Hony Capital chairman John Zhao said at the time his group had invested in Santos "because of its strategic position in Australia and synergies with the rapidly growing China energy market".

Hony took an equity stake in ENN as part of the Santos share sale.

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