China New Energy Announces Acquisition of Fuzhou City Lean Zhongran Gas Inc. and Wuyuan County Zhongran Gas Inc.

TIANJIN, China, Dec. 24 /PRNewswire-Asia-FirstCall/ -- China New Energy Group Company (OTC:CNER) (BULLETIN BOARD: CNER)  ("China New Energy" or the "Company"), a vertically integrated natural gas company engaged in the development of natural gas distribution networks, and the distribution of natural gas to residential, industrial, and commercial users in small and medium sized cities in China, announced that on December 16, 2009, Willsky Development, Ltd., the Company's wholly-owned subsidiary, entered into an equity purchase agreement to acquire all of the outstanding equity interest of Fuzhou City Lean Zhongran Gas Inc.("Lean Zhongran") and Wuyuan County Zhongran Gas Inc. ("Wuyuan Zhongran") for RMB 4.8 million (approximately $0.7 million) and RMB 6.0 million (approximately $0.9 million), respectively. The purchase price for both companies is payable in three installments based on the satisfaction of various mutually agreed upon closing conditions.

Founded in 2006 and based in the Jiangxi Province of China, both Lean Zhongran and Wuyuan Zhongran are primarily engaged in the business of natural gas supply and the construction and development of gas pipeline networks in urban areas. In 2006, both companies obtained 30-year exclusive operating licenses from their local governments to construct and develop gas pipeline networks and supply gas in their respective counties.

"We are pleased to expand our business to Jiangxi Province, which is one of major developing regions in central China," said Mr. Yangkan Chong, Chief Executive Officer. "With these two additional acquisitions, we are continuing to execute on our growth strategy of expanding into under-penetrated, growing small- and medium-sized cities in China where we can enter into long-term exclusive agreements with local governments to develop natural gas distribution networks and supply natural gas in their area."

About China New Energy Group Company

China New Energy Group Company ("China New Energy" or the "Company") is a vertically integrated natural gas company engaged in the development of natural gas distribution networks, and the distribution of natural gas to residential, industrial, and commercial users in small and medium sized cities in China. The Company generates revenues primarily from the connection fees it charges its customers for interconnecting to pipelines in its natural gas distribution networks, and fees for natural gas usage. The Company currently has exclusive natural gas distribution rights for Acheng, Dashiqiao, and Nandaihe, three cities located in Northern China. For more information, please visit http://www.cnegc.com/ .

Safe Harbor Statement

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Any statements set forth above that are not historical facts are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors include, but are not limited to, the Company's ability to access natural gas for distribution, and ability to identify and develop operational locations under favorable terms, changes in natural gas pricing mechanism imposed by the Chinese government, changes in the regulatory environment and future national or regional economic and competitive conditions, and other factors detailed from time to time in the Company's filings with the United States Securities and Exchange Commission and other regulatory authorities. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

  For more information, please contact:

  Company Contact:
   Eric Yu, Chief Financial Officer
   Email: 
   Web:   http://www.cnegc.com/

  Investor Relations Contact:
   CCG Investor Relations
   Mr. Athan Dounis, Account Manager
   Tel:   [phone]
   Email: 

   Mr. Crocker Coulson, President
   Tel:   [phone] (New York)
   Email: 
   Web:   http://www.ccgirasia.com/

DATASOURCE: China New Energy Group Company



CONTACT: Eric Yu, Chief Financial Officer, ; Investors,

Athan Dounis, Account Manager, [phone], , or

Crocker Coulson, President, [phone] (New York), or

, both of CCG Investor Relations, for China New

Energy Group Company



Web Site:  http://www.cnegc.com/

http://www.ccgirasia.com/ 

Copyright