Business Activities News
- Sinopec to buy US$447m assets, plans bonds
Date: 8-Dec-2006 Sources: (Shenzhen Daily)
SINOPEC Corp., Asia's largest refiner, said Thursday it would buy 3.5 billion yuan (US$447.4 million) worth of oil production assets from a unit of its controlling shareholder, China Petrochemical Corp.
Sinopec said in a statement it would buy the assets owned by Shengli Petroleum Administrative Bureau and would pay for the purchase with internal resources.
The assets include 64.73 percent of Shengli Oilfield Dongsheng Jinggong Petroleum Development Stock Ltd., which owns 1,023 oil wells and is involved in crude oil production at 84 oil production areas of Shengli Oilfields.
The company will buy 100 percent of Petroleum Development Center of Shengli Petroleum Administrative Bureau, which owns 244 oil wells with production areas at 23 oil production areas of China Shandong Shengli Oil Field.
The refiner will also take 52 percent of Shengli Oilfield Zhongsheng Petroleum Development Co. Ltd., which is an oil production firm holding 41 oil wells.
In addition, it will buy 52 percent of the oil production assets of the Shengli bureau, comprising 28 oil wells together with crude oil production equipment, oil transportation pipelines and related assets.
In a separate statement, Sinopec said it would issue US$1.5 billion of bonds convertible to the company's Hong Kong-listed H-shares. It will also issue 10 billion yuan of domestic corporate bonds, pending approval by shareholders at a meeting Jan. 22.
The issue size, interest rate, conversion price, exchange rate structure and timing of the issue of the convertible bond had yet to be determined, and the bonds would be offered to professional and institutional investors, Sinopec said.
The company said net proceeds from the convertible bond would be used to repay existing foreign currency loans related to the privatisation of its subsidiaries, Beijing Yanhua Petrochemical Co. Ltd. and Sinopec Zhenhai Refining & Chemical Co. Ltd.
The refiner said it would use proceeds from the domestic bond issue to fund projects such as a one million tonne per annum ethylene and ancillary project in Tianjin, a one million tonne per annum ethylene project in Zhenhai and an 800,000 ton per annum ethylene upgrade project in Guangzhou.
Shares of Sinopec have risen 68 percent so far this year to end at HK$6.48 on Wednesday, in line with a 65 percent gain for the index of Chinese companies listed in Hong Kong.
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