Sinopec said to weigh dual IPO for HK, Shanghai units

Oil tanks at a Sinopec plant in China's Anhui province. The IPO could widen the company's investor base outside China and would be a shot in the arm for President Xi Jinping's market-oriented reforms, as Sinopec comes under pressure to increase divid
Oil tanks at a Sinopec plant in China's Anhui province. The IPO could widen the company's investor base outside China and would be a shot in the arm for President Xi Jinping's market-oriented reforms, as Sinopec comes under pressure to increase dividends.PHOTO: REUTERS

Listing may happen next year, sources say, though there's no final decision yet

SHANGHAI • China Petroleum & Chemical is considering a dual listing for its retail business, which could take place next year, according to people with knowledge of the matter.

The world's biggest oil refiner, known as Sinopec, is mulling over a plan to sell shares first in Hong Kong and then in Shanghai, the sources said, asking not to be named as the details are not public.

The dual offering is one option under consideration and no final decision has been made, they said. Bloomberg reported in December that the company had asked banks to submit proposals for the IPO to raise as much as US$10 billion (S$14 billion) in Hong Kong.

The board of the retail unit would decide the timing and details of the listing, chairman Wang Yupu said during the company's annual earnings briefing on Monday, without providing further details. A Sinopec spokesman reiterated Mr Wang's comments yesterday.

The IPO will provide a jolt to market-oriented reforms encouraged by the government of President Xi Jinping - which have stagnated in the past two years - and may widen the investor base outside China.

It would also raise funds as the company begins to boost spending for the first time since 2013 and comes under government and shareholder pressure to increase dividends.

Sinopec's retail operations include about 30,600 fuel stations under its own brand as well as a network of convenience stores. It proposed a listing of the retail business in 2014, when it sold a 29.99 per cent stake for 107 billion yuan (S$21.6 billion) to a group of investors including China Life Insurance and billionaire Guo Guangchang's Fosun International.

Sinopec separately said this week that it was invited by Saudi Arabian Oil to invest in its own IPO, which could be the world's biggest.

The Chinese company may be aiming to start its listing before the offering by the oil exporter, which is known as Saudi Aramco, as it may suck up market liquidity, according to Mr Gordon Kwan, head of oil and gas research at Nomura Holdings in Hong Kong.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on April 01, 2017, with the headline 'Sinopec said to weigh dual IPO for HK, Shanghai units'. Print Edition | Subscribe