STAR-BULLETIN / 2001 Citizens Communications Co. announced yesterday it sold The Gas Company of Hawaii to Singapore-based K1 Ventures Ltd. for $115 million. Gas Company employees worked on a gas leak last year on Kalakaua Avenue in Waikiki.

Gas Company sold
in $115 million deal

Singapore-based K1 Ventures is buying
the utility from Citizens Communications

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By Tim Ruel
truel@starbulletin.com

A subsidiary of a Singapore investment firm is paying $115 million in cash to buy The Gas Company of Hawaii from Citizens Communications Co.

The Singapore company, K1 Ventures Ltd., is led by Steven J. Green, U.S. ambassador to Singapore during the Clinton administration, and a figure in the controversial bankruptcy of communications giant Global Crossing.

Citizens bought the Gas Company for $100 million in 1997, and has invested more than $40 million in the firm.

The buyer of the Gas Company, K-1 USA Ventures Inc., intends to make job offers to all of the firm's 300 employees in the state, and plans to assume collective bargaining contracts with the Teamsters union, said Gas Company spokesman Steve Golden. No major changes are planned for operations.

The deal is expected to close late next year, and is subject to approval by regulators including the state Public Utilities Commission, which controls the Gas Company's sale of propane and synthetic natural gas.

Green, once chairman and chief executive of Samsonite, was appointed in 1995 to President Clinton's Export Council, then became Singapore ambassador two years later. Green stepped down as ambassador in March 2001 when the Bush administration took power, and later joined Global Crossing's board of directors.

In September 2001, Green and Global Crossing Chairman Gary Winnick bought a 13.4 percent stake in K1 Ventures for about $25 million, according to the New York Times. K1 Ventures is controlled by the Singapore government's Temasek Holdings, owner of a firm that later submitted a joint bid to buy Global Crossing out of bankruptcy. Green and Winnick's investment in K1 Ventures was not fully disclosed at the time to Global Crossing's board, according to the Times.

Both men told the Times they would not receive any direct benefit from the purchase of Global Crossing through their K1 Ventures investment.

Regardless, Winnick resigned from the board of K1 Ventures after the Times report appeared in February of this year. Green, now chairman and chief executive of K1 Ventures, left the board of Global Crossing in August.

K1 Ventures, a former marine unit turned venture-capital fund, is seeking other energy investments than Hawaii's Gas Company. Earlier this week, another K1 Ventures unit formed a joint venture with New Orleans-based McMoRan Exploration Co. to acquire energy-related business.

The Gas Company, founded in 1904, is expected to have revenue of $105 million this year, Golden said.

"K-1 believes in investing in companies in markets that are poised to rebound," Green said in a statement. "Our major shareholders are based in Singapore and they view Hawaii as a natural bridge for further expansion in the United States. As a further boost to the local economy, we also plan to have services such as accounting, banking, insurance and tax functions that are currently done out of state brought back to Hawaii."

Stamford, Conn.-based Citizens will have generated $1.9 billion from selling off its utilities after the Gas Company sale, Citizens said. Last month, Citizens sold the former Kauai Electric Co. to a Garden Isle cooperative for $215 million.