Almost all outstanding shares of four subsidiaries of China Petroleum & Chemical Corporation (Sinopec) have been purchased by the parent company and will no longer be publicly listed after tomorrow, said sources with Sinopec on Wednesday.
Sinopec said that Thursday will be the last trading day of Sinopec Qilu Petrochemical Co., Sinopec Yangzi Petrochemical Co., Sinopec Zhongyuan Petroleum Co., and Sinopec Shengli Oilfield Dynamic Group Co. Sinopec announced on February 15 that it would buy back its four listed subsidiaries for 14.3 billion yuan (US$1.79 billion).
According to Sinopec the price represents a premium of 24.4 percent, 26.2 percent, 13.2 percent and 16.9 percent over the closing price of Qilu, Yangzi, Zhongyuan and Shengli respectively on February 7, 2006, the last day before trading was suspended pending news of the purchase offer.
The move by Sinopec delivers on its promises in 2000 to restructure its assets in order to strengthen the competency of its core business, Zhang Jiaren, CFO of Sinopec, said earlier.
Sinopec still has five listed subsidiaries. Zhang said Sinopec's goal is to purchase all outstanding shares in the companies but did not give details on when that might take place.
"Everything is still being researched and under discussion," said Zhang.
Li Guohong, a researcher of the securities market said that the buy-back of the other five listed companies is not likely to occur soon.
As the largest oil refiner in Asia, Sinopec holds 11 percent of the total market value of China's A-share market. Together with its listed subsidiaries, the value of Sinopec's floating shares exceeds 20 billion yuan.
(Xinhua News Agency April 6, 2006)