Sinopec sells 30% of its fuel distribution unit to 25 investors
September 22, 2014 Category Petrochemicals, Weekly
China Petroleum & Chemical (Sinopec) saw its shares drop 6.8% following the news it agreed to sell 30% of its fuel distribution unit to 25 investors for CNY107 billion since a lack of big-name retailers in the buyers’ list raised question on the strategic value they would bring. Home appliance major Haier Electronics Group has agreed to buy 0.34% of Sinopec Sales and a firm controlled by China Huiyuan Juice Group’s parent will take a 0.84% stake. Both have agreed to cooperate with Sinopec on cross-selling and logistics. “With 25 firms participating, there will be questions as to the effectiveness of the consortium to drive reform, but it also highlights the broad appeal of this business,” said Sanford C. Bernstein Analyst Neil Beveridge. Separately, Sinopec Yizheng Chemical Fiber said it would sell all of its polyester products production operation to Sinopec and buy all of Sinopec Oilfield Service Corp for CNY24 billion by issuing shares. A Barclays research report said Sinopec Oilfield Service posted a net profit margin of 1% to 2% between 2011 and last year, much lower than the 7% to 15% at privately-owned firms.
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