Sinopec to sell $17.4 billion stake to investors 

Shares in China Petroleum & Chemical Corporation, known as Sinopec, fell on Monday morning as markets reacted to the company’s plans to raise $17.4 billion by selling a stake in its nationwide chain of gas stations to outside investors.

Sinopec, China’s biggest refiner, has agreed to sell a 30 percent stake in Sinopec Marketing to a consortium of 25 investors, nearly all of which are from mainland China or Hong Kong, according to a Hong Kong stock exchange announcement filed late Sunday.

Investors appear to have been unimpressed by news of the deal, which had been in the works for seven months. Shares in Sinopec were down about 6 percent in midday trading on Monday in Hong Kong.

The refiner attracted what it described as strong interest from potential investors, and by last month it had shortlisted 37 bidders for the unit.

The biggest investors include China Life Insurance Company; a fund owned by the People’s Insurance Company (Group) of China and Tencent Holdings; a fund owned by China International Capital Corporation, an investment bank; and Harvest Fund Management, a large Chinese asset manager. Each of these four investor groups agreed to commit 10 billion renminbi for a 2.8 percent stake in Sinopec Marketing.

While Sinopec Marketing relies on the sale and storage of petroleum products for most of its revenue, the attraction of the unit to outside investors is the chance to expand retail sales at the company’s gas stations.

In an effort to build customer loyalty, Sinopec Marketing issued 108 million Sinopec fuel cards to 80 million people at the end of last year.

Source: NYT- Sinopec to sell $17.4 billion stake

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