Singapore firm buying Gas Co. for $115M in cash

Bloomberg News Service

Citizens Utilities said yesterday it had agreed to sell its Gas Co. of Hawai'i unit to a Singapore investment firm for $115 million in cash.

Gas Co., which has about 300 employees, produces and sells natural gas to 115,000 consumers in Hawai'i. It was founded in 1904.

Stamford, Conn.-based Citizens has been selling its utility units to focus on its telecommunications services and reduce debt. The company operates phone service in 24 states.

As part of a pullback from Hawai'i, the company has been trying to sell its Gas Co. subsidiary for three years. Earlier this year, it sold its Kaua'i electric company, with about 120 employees and nearly 30,000 customers.

After the Hawai'i sale, Citizens will have generated $1.9 billion from selling utilities, the company said in a statement.

K-1 USA Ventures Inc., a unit of K1 Ventures Ltd., is buying the gas business, Citizens said.

Citizens spokesman Michael Zarrella declined to elaborate on yesterday's statement.

Citizens Utilities entered the Hawai'i market 30 years ago, when it acquired Kauai Electric from McBryde Sugar Co. In 1997, it bought Gas Co. from BHP Hawaii.

Separately, the company said it had finished investigating the alleged theft of $7.8 million by two former officers, and would recover the amount from the workers plus insurance.

The U.S. attorney in New York and the Securities and Exchange Commission are examining irregularities in the $7.8 million in payments for which the company did not receive benefits, Citizens said last month.

Citizens shares fell 3 cents, to $9.68 in New York Stock Exchange composite trading. The shares have fallen 9 percent this year.