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| Sinopec Offers to Buy back 4 Subsidiaries |
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China Petroleum & Chemical Corp (Sinopec), The four units are Sinopec Qilu Petrochemical Co, Sinopec Yangzi Petrochemical Co, Sinopec Zhongyuan Petroleum Co, and Sinopec Shengli Oil Field Dynamic Group Co. Sinopec is offering to buy shares of the four units for between 13 percent and 26 percent more than their last trading price. The four stocks were suspended from the domestic A-share market one week ago. Sinopec will pay 10.18 yuan (US$1.26) a share to take Sinopec Qilu Petrochemical Co private, a premium of 24 percent on its last traded price. And it will pay 12.12 yuan (US$1.5) a share for Sinopec Zhongyuan Petroleum, 13 percent more than their last close. As for the other two subsidiaries, the company is offering to buy shares of Sinopec Yangzi Petrochemical Co for 13.95 yuan (US$1.73), a 26 percent premium, and 10.3 yuan (US$1.28) a share for Sinopec Shengli Oil Field Dynamic Group Co, a premium of 17 percent. Sinopec shares closed 1.6 percent higher at HK$4.775 (61 US cents) yesterday. Its A-shares rose 6 percent to close at 5.39 yuan (67 US cents) in Just a week before the buy-back, an analyst who is close to Sinopec's plan said that the market value of shares in the four subsidiaries could reach 11.8 billion yuan (US$1.46 billion). The buy-back money would not have a major impact on the In December the company received 10 billion yuan (US$1.2 billion) from the Chinese Government in a one-off subsidy payment to offset losses incurred in its refining business. "Besides, this State-owned flagship company has easy access to bank loans," an analyst from Beijing-based CITIC Securities said. The buy-back of the four units was to simplify the company's corporate structure. Since its listing in October 2000, Sinopec said that it planed to take full ownership of its units. An industrial analyst who declined to be named said the move will further enhance the group's corporate transparency and improve corporate efficiency, and reduce the number of connected transactions. In 2004 Sinopec took plastics maker Sinopec's buy-back move followed its domestic rival PetroChina, which announced plans to streamline its business structure by privatizing already-listed subsidiaries. At the end of last year PetroChina bought back all the public shares of its three listed subsidiaries based in northeastern According to the PetroChina statement, it spent 637.5 million yuan (US$78.6 million) on the purchase of Jinzhou Petrochemical and 1.76 billion yuan (US$217 million) on Liaohe Oilfield, both of which are listed on the Shenzhen Stock Exchange. And to acquire Jilin Chemical, which is traded on the Shenzhen, Hong Kong and (
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