July 10 (Bloomberg) -- Kingdream Plc, an oil and drilling equipment maker controlled by Asia’s biggest refiner, said it plans to sell shares in a private placement to raise funds to buy assets from parent China Petrochemical Corp.
Preparation for the share placement is still under way, Kingdream said yesterday in a statement, without disclosing the amount it plans to raise or the assets targeted. The stock, suspended from trading since May 28 pending a “major issue” with the parent, will remain suspended until further notice.
State-owned China Petrochemical, known as Sinopec Group, is seeking to evolve into a shareholding company and let professionally-run, listed units handle businesses such as oil and gas exploration, engineering and oilfield services, Chairman Fu Chengyu said in March. The refiner has successfully merged units that designed and built chemical plants into Sinopec Engineering Group Co. and listed it in Hong Kong last year.
Sinopec Group may try to sell its oilfield services business to Kingdream to allow the unit a back-door listing into China’s stock market, said Simon Powell, head of oil and gas research as CLSA Ltd. in Hong Kong.
“Chairman Fu has made it clear since 2011 that he wanted to list the oilfield services separately,” Power said by phone. Injecting the asset into Kingdream could be the most cost-effective and time-saving way, he said.
Sinopec Yizheng Chemical Fibre Co., Sinopec Group’s chemical manufacturing unit, has also been suspended since May 28 as the parent is “planning a material transaction” related to the company, according to stock filings.
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