Sinochem mulls listing oil assets in Hong Kong

Bloomberg

China’s Sinochem Group is considering listing its oil-related business in Hong Kong, according to people with knowledge of the plan.
The state-owned chemicals conglomerate is making ini-
tial evaluations of its oil assets, which have a combined va-
lue of around 100 billion
yuan ($14.6 billion), said the people, who asked not to be identified as the information is confidential. It hasn’t made a final decision about the assets that would be included in a listing, which may happen as soon as early 2018, and details such as valuation may change, another person said.
The move would be in line with President Xi Jinping’s drive to reform the nation’s bloated state-owned enterprises by introducing outside capital and mixed ownership.
Nobody answered two calls, a fax and and email to Sinochem seeking comment.
Bloomberg reported in March that Sinochem hired investment banks to arrange a stake sale to outside investors ahead
of a potential initial public offering. Sinochem could still eventually seek listing of entire group, two of the people said. Separately, the company is
seeking a merger with China National Chemical Corp., known as ChemChina, Bloomberg reported in October.
Sinochem’s oil assets stretch from upstream production and oil refining to tankers, storage facilities and fuel stations, according to its website. The company has recoverable reserves of roughly 800 million barrels of oil equivalent in nine countries, as well as refineries with annual processing capacity of around 25 million metric tons, and it trades about 100 million tons of crude and products annually, the site says.

CHEMICAL CORE
Sinochem could be looking to shed oil assets to focus the parent company on its core chemicals business, said Tian Miao, a Beijing-based analyst at North Square Blue Oak Ltd.
The Beijing-based company has three Hong Kong-listed units focusing on fertilizer, real estate and finance, as well as one Shanghai-listed company, Sinochem International Corp., investing in areas from energy to rubber as well as metallurgy. The group held total assets of more than 350 billion yuan at the end of 2015, according to its website.
Sinochem International in Shanghai fell as much as 1.9 percent before paring losses to trade down 1.6 percent at 9.55 yuan as of 2:36 p.m. local time. Sinofert Holdings Ltd. in Hong Kong was unchanged at 99 Hong Kong cents, compared with a 0.5 percent loss in the city’s benchmark Hang Seng Index. China Jinmao Holdings Group Ltd. gained 3.2 percent, while Far East Horizon Ltd. dropped 0.4 percent.