Yizheng Plans $5 Billion Deals to Become Petroleum EngineerBloomberg News
Sinopec Yizheng Chemical Fibre Co. plans to change itself into a petroleum-engineering company from a polyester maker through 30.6 billion yuan ($5 billion) of share-for-asset swaps with its controlling shareholder and ultimate parent.
The company will sell all its assets and liabilities to China Petroleum & Chemical Corp., known as Sinopec Corp., for 6.49 billion yuan, according to a statement to the Hong Kong stock exchange yesterday. Sinopec will pay with the 40.25 percent stake in Yizheng that it now owns plus 188 million yuan in cash.
Yizheng said it then plans to buy Sinopec Oilfield Service Corp. from China Petrochemical Corp., or Sinopec Group, Sinopec Corp.’s controlling shareholder, for about 24.1 billion yuan, payable in the form of 9.22 billion new shares.
Sinopec Group aims 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 merged units that design and build chemical plants into Sinopec Engineering Group Co. and listed it in Hong Kong last year.
Yizheng shares were suspended starting May 28 and will resume trading in Hong Kong on Sept. 15. They had risen 12 percent in Hong Kong trading this year before the halt.
The company, which manufactures and distributes polyester chips, staple fiber, hollow fiber and polyester filament, said it plans to cancel the 2.42 billion A shares it’s buying from Sinopec Corp. The stock is valued at 6.3 billion yuan at 2.61 yuan a share, Yizheng’s average Shanghai closing price in its last 20 trading days, according to the filing.
Sinopec will pay the 188 million yuan in cash within 20 business days of completion, according to the statement.
(An earlier version of this story corrected the name of the company buying Sinopec Yizheng’s assets.)
— With assistance by Guo Aibing, and Alexandra Ho