Xinxing Ductile Iron Pipes Signs Agreement with Mexican Petroleum to Set up $5-Bln Investment Fund

SHANGHAI, Dec. 26 (SMM) – China’s Xinxing Ductile Iron Pipes Co. signed a framework agreement with Mexican state-owned petroleum company to jointly set up a $5 billion energy industry investment fund.

Xinxing Ductile signed the contract with Mexican Petroleum’s offshore unit P.M.I. Holding on Dec. 20, the Beijing-headquartered iron products manufacturer told Shenzhen Stock Exchange today.

The fund would invest in energy infrastructure construction, energy exploration, exploitation and trading, which would not only help with the company’s industrial upgrading but also benefit its sales of iron pipes, fittings and steel gratings, Xinxing Ductile said in a statement.

Subscribed capital for the investment fund is designed to be $5 billion with Xinxing Ductile and Cayman Islands-based SPF Capital contributing 80% and P.M.I., the remaining 20%, it said.

Xinxing Ductile’s own subscription would be no more than 16% of the designed fund scale, or $1.6 billion, which accounts for 40.62% of the company’s unaudited net asset as of the end of 2012, it said. The rest would be solicited from both Chinese and overseas investors, it added.