Friday, November 27, 2015   

Mainland oil giant poised to tap market for $24b

Staff reporters

Tuesday, February 05, 2013


China Petroleum and Chemical Corp (0386), better known as Sinopec, is selling H shares to reap as much as HK$24 billion in the largest share placement for years in Hong Kong.

The largest oil refiner in Asia is issuing 2.85 billion new H shares, which is 14.5 percent of the enlarged share base, or a 3.2 percent stake if A shares are included, the company said in a statement last night.

The selling price, at HK$8.45 apiece, represents a 9.5 percent discount to yesterday's closing price of HK$ 9.34.

Goldman Sachs is handling the deal.

The oil giant is subject to a 180-day lock-up after the share sale.

Sinopec said the share sale is to "optimize its capital structure and financial structure" as well as attract high-caliber investors.

The company is in talks to buy US$8 billion (HK$62.24 billion) of upstream oil and gas assets from its state-owned parent, Dow Jones Newswires reported last week.

The listed company plans to buy upstream assets in countries such as Britain, Russia, Colombia and Kazakhstan from its parent, China Petrochemical Corp, or Sinopec Group.

The acquisitions, due to take place in April, are aimed at putting Sinopec on a par with integrated global energy majors.

If the takeover is realized, it will mark the first major move by chairman Fu Chengyu, who in 2011 moved to Sinopec from another oil giant, CNOOC (0883).

Sinopec Group has finished restructuring its eight engineering and construction subsidiaries into one entity and plans to spin off the new unit in Hong Kong in May at the earliest. The coming IPO is expected to weigh at around HK$11.7 billion.

Sinopec shares rose 6.4 percent this year, outshooting the 4.5 percent rise in the Hang Seng Index. The stock rally attracted many listed firms to reap money from the market. Chinese gold miner Dejin Resources Group (1163) raised around HK$15.5 million by placing up to 37 million existing shares to its shareholder - Innovation Union - at HK$0.42 per share.

This would mean a 19.04 percent discount to yesterday closing price of HK$0.52 per share.

Investment-cum-solar-energy- product maker Mascotte Holdings (0136) proposed a rights issue of four rights shares for every one share at HK$0.07 per rights share to raise as much as HK$515.62 million.

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