China-based Green Dragon Gas said it paid about $55 million to redeem the only outstanding convertible bond and simultaneously issued shares to BlackRock, making the fund manager its second-largest shareholder.

The redeemed bond's conversion price was equivalent to the placing price of the new shares, the company said.

Green Dragon, which is now debt free, said it issued 12 million new shares to BlackRock to raise $75 million.

This transaction with BlackRock within months of the recent ConocoPhillips transaction puts the company on a path to conclude its decision on a move to a main board, Chief Executive Randeep Grewal said in a statement.

In August, Green Dragon, which plans to move to a main market listing in either London or Hong Kong within the next six months, said its Greka unit signed a farm out agreement with U.S. oil major ConocoPhillips to develop wells at its Chinese coal bed methane production sharing contracts.

The company said it was in position to immediately commit to permitting the infrastructure enhancements and construction so as to begin commercial sales by mid 2010.

Shares of the company closed at 7.175 pence Monday on the London Stock Exchange. (Reporting by Aditi Samajpati in Bangalore; Editing by Aradhana Aravindan)