Singapore state investment fund Temasek Holdings Pte and private equity firm Hopu Investment Management Co. of Beijing, China, jointly plan to sink up to $1.1 billion in Chesapeake Energy Corp.
Temasek, which backed Hopu’s startup in 2008, said the partners agreed to collectively buy $600 million of Chesapeake nonvoting convertible preferred stock. They have a 30-day option to buy an additional $500 million in preferred stock.
Chesapeake would use the funds to pay down debt as part of a longer-range plan to invest in more oil and natural gas liquids plays (see Daily GPI, May 11).
Temasek, which manages around $124 billion in various commodity investments, stated that it remains “confident of the growth potential of the energy sector.”
The Singapore fund said the price for natural gas, which is trading at less than a third of the price of oil on an equivalent basis, is at a “cyclical low point” but is confident that demand will increase because of environmental reasons.
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