Sinopec agrees to US$5b loan
Source: Bloomberg News |
April 27, 2011, Wednesday
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Print Edition
Print Edition
CHINA Petrochemical Corp, Asia's biggest refiner, agreed to borrow US$5 billion, an increase of US$1.2 billion from its original plan, to fund overseas acquisitions, according to a person familiar with the matter.
The five-year term loans were offered to banks with interest and fee payments, the so-called top level all-in pricing, of 127 basis points more than the London interbank offered rate, said the person, who asked not to be identified because the details are private. China Petrochemical originally sought loans of US$3.8 billion at the same price, according to two people familiar with the matter on April 18.
Huang Wensheng, a spokesman for Sinopec Group, as the refiner is known, declined to comment on the loan size. "Borrowing is part of the company's normal operations," he said yesterday. "It's natural that the company is boosting capital for its overseas business."
Sinopec Group is expanding abroad as the government's fuel-price controls erode profit in its home market. Overseas assets rose to 31 percent of the total last year and global sales climbed to 27 percent, Huang said, without giving comparative numbers.
The firm loses about US$20 for every barrel of crude oil processed, the Economic Observer said yesterday. China controls fuel tariffs to curb consumer price inflation, which was 5.4 percent last month, the highest since 2008.
The loan will also be used to refinance debt associated with the group's purchase of a stake in Syncrude Canada Ltd last year, the person familiar with the group's loan said yesterday.
Sinopec Group last Thursday agreed to buy a 15 percent stake and liquefied natural gas in a venture with ConocoPhillips and Origin Energy Ltd in Australia's largest export deal for the fuel.
The five-year term loans were offered to banks with interest and fee payments, the so-called top level all-in pricing, of 127 basis points more than the London interbank offered rate, said the person, who asked not to be identified because the details are private. China Petrochemical originally sought loans of US$3.8 billion at the same price, according to two people familiar with the matter on April 18.
Huang Wensheng, a spokesman for Sinopec Group, as the refiner is known, declined to comment on the loan size. "Borrowing is part of the company's normal operations," he said yesterday. "It's natural that the company is boosting capital for its overseas business."
Sinopec Group is expanding abroad as the government's fuel-price controls erode profit in its home market. Overseas assets rose to 31 percent of the total last year and global sales climbed to 27 percent, Huang said, without giving comparative numbers.
The firm loses about US$20 for every barrel of crude oil processed, the Economic Observer said yesterday. China controls fuel tariffs to curb consumer price inflation, which was 5.4 percent last month, the highest since 2008.
The loan will also be used to refinance debt associated with the group's purchase of a stake in Syncrude Canada Ltd last year, the person familiar with the group's loan said yesterday.
Sinopec Group last Thursday agreed to buy a 15 percent stake and liquefied natural gas in a venture with ConocoPhillips and Origin Energy Ltd in Australia's largest export deal for the fuel.
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