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Sinopec plans to raise US$3.1b
By Richard Fu |
February 5, 2013, Tuesday
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Online Edition
Online Edition
CHINA Petroleum & Chemical Corp, or Sinopec, said it plans to raise HK$23.97 billion (US$3.1 billion) via a private share placement priced at a discount.
Sinopec, Asia's largest refiner, will sell 2.85 billion new H shares at HK$8.45 apiece, the company said yesterday after the Hong Kong market closed. The offer price was 9.5 percent less than yesterday's close.
The company didn't say what it will specifically use the proceeds for, only saying they will be for "general corporate purposes."
Mirae Asset Securities analyst Gordon Kwan said the amount will increase Sinopec's upstream exploration and production capital expenditure budget from US$12.9 billion in 2012 to more than US$16 billion this year.
"Previous remarks at last year's analyst briefings suggested that the placement proceeds will help fund the acquisition of some of the parent's US$42 billion worth of overseas upstream assets," he said.
These assets offer higher profit margins than the existing refining and petrochemical business, Kwan said.
The share placement represents 3.2 percent of Sinopec's total outstanding number of H and A shares. Sinopec tumbled as much as 7 percent today in Hong Kong as investors reacted to the dilution.
Sinopec, Asia's largest refiner, will sell 2.85 billion new H shares at HK$8.45 apiece, the company said yesterday after the Hong Kong market closed. The offer price was 9.5 percent less than yesterday's close.
The company didn't say what it will specifically use the proceeds for, only saying they will be for "general corporate purposes."
Mirae Asset Securities analyst Gordon Kwan said the amount will increase Sinopec's upstream exploration and production capital expenditure budget from US$12.9 billion in 2012 to more than US$16 billion this year.
"Previous remarks at last year's analyst briefings suggested that the placement proceeds will help fund the acquisition of some of the parent's US$42 billion worth of overseas upstream assets," he said.
These assets offer higher profit margins than the existing refining and petrochemical business, Kwan said.
The share placement represents 3.2 percent of Sinopec's total outstanding number of H and A shares. Sinopec tumbled as much as 7 percent today in Hong Kong as investors reacted to the dilution.
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