Hans Energy takes majority stake in Citybus parent, eyes hydrogen development

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Hong Kong-listed Hans Energy has acquired a majority stake in Bravo Transport, the parent company of the city’s largest bus operator Citybus, in a move the company said will accelerate adoption of hydrogen-fuelled vehicles and help Hong Kong’s net-zero transition.

Hans Energy acquired 54.44 per cent of the shares in Bravo for HK$2.72 billion (US$348 million), giving it 70 per cent ownership after the completion of the transaction, the company said on Friday.

Hong Kong-based private-equity firm Templewater, which owns the remaining 30 per cent, acquired Bravo Transport and Citybus in 2020. It will become a minority shareholder of Hans Energy, with around 6.59 per cent of the equity shares issued at HK$0.7961 per share.

“This acquisition aims to vertically integrate the energy supplier and key end-user,” said Hans Energy CEO Yang Dong. Hans Energy will use its expertise in petroleum product trading and logistics to reduce fuel costs for Citybus, while its “strategic development of the hydrogen industry” aligns with Citybus’s net-zero emissions goal, he said.

Hans Energy, which trades refined oil and petrochemical products and owns a loading terminal, jetties and fuel storage tanks in Dongguan, Guangdong province, is transitioning its focus from the traditional energy sector to renewable energy.

In 2020 it became a shareholder in Bravo Transport, which then owned both Citybus and New World First Bus, which have since merged under the Citybus name. Last year Hans Energy invested in Hong Kong’s first hydrogen refuelling station, which allowed Citybus’s first hydrogen-powered double-decker bus to hit the road earlier this year.

The stake acquisition will cement the long-term prospects and future business continuity for Citybus, as it will become part of a listed company on the main board of Hong Kong stock exchange, said Cliff Zhang, Templewater’s chairman and CEO.

Templewater, which launched a decarbonisation fund this month focusing on investing in hydrogen, energy storage and carbon capture, utilisation and storage, will continue to serve on the board of Bravo Transport and Citybus, to advise on business development, acquisitions, and new energy and hydrogen-related projects.

Hans Energy will also have the right to acquire the remaining 30 per cent of Bravo Transport from Templewater within the next five years, and Templewater has the option to sell its shares to Hans Energy between 2029 and 2031, according to Hans Energy.

The transport sector contributed 19.7 per cent of the city’s carbon emissions in 2020, the second largest portion after power generation at 60.4 per cent. Hong Kong plans to reach carbon neutrality by 2050 according to its climate action plan announced in 2021, and electrification of vehicles and ferries is a top priority in that net-zero strategy.

Passengers, many of whom are bus fans, line up to get on an electric bus running from West Kowloon Station to Kai Tak at West Kowloon Station Bus Terminal on May 5, 2024, in part of a trial for Citybus’s plan to replace all its diesel models with low-emission ones before 2045. Photo: Xiaomei Chen

Zero-emissions vehicles based on hydrogen fuel cells, which only emit water, have huge potential in heavy transport such as buses and trucks, and could complement battery-powered electric vehicles to help decarbonise the sector.

In 2021, the government set up an interdepartmental working group to facilitate the introduction of hydrogen into the city’s energy mix. It aimed to launch pilots of fuel cell buses and heavy vehicles by 2024.

Bravo Transport is valued at HK$5 billion, with a media business in addition to its main business in franchised and non-franchised bus operations. The company operates more than 1,700 buses across Hong Kong Island, Kowloon and the New Territories and carries over 1 million people per day.

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