Sinochem Energy Obtained Funding of Over RMB 10 Billion from Strategic Investors

Source:Economic Daily     Author:     Date:2019-12-27     

On December 27, the Signing Ceremony for Sinochem Energy’s Capital Increase Strategic Partnership Project was held. As this project attracted RMB 11.555 billion, it has become the largest project of “ top 100 subsidiaries of central enterprises and top 100 local state-owned backbone enterprises” in the reform of state-owned enterprises (SOEs).

According to the Capital Increase Agreement, Sinochem Energy released 20% of its shares in reward for introducing five investors with an investment totaling RMB 11.555 billion. The five investors are ABC Financial Asset Investment Co., Ltd., ICBC Financial Asset Investment Co., Ltd., Beijing Chengtong ICBC Equity Investment Fund (Limited Partnership), Qingdao Zhongxin Dinghui Equity Investment Partnership (Limited Partnership) and CITIC Securities.

To our knowledge, as a unified operating platform for Sinochem Group’s energy business, Sinochem Energy is shaping itself into a technology-driven and innovation-fueled petroleum and petrochemical business operator and comprehensive service provider. It consists of business sectors including petroleum trading, refining and petrochemicals, petroleum distribution and retailing, petrochemicals trading and distribution, warehousing and logistics, and industrial park development. In addition, Sinochem Energy has evolved into a key domestic energy player featuring internationalization, complete industrial chain, and prominent marketing capabilities with growing industrial strength and sustainability.

With the target of becoming more practical and stronger and building core competitiveness, the SBU of Energy has been accelerating its specialized restructuring and consolidation since the five SBUs were established by Sinochem Group at the end of 2016. Besides, starting from equity diversification, Sinochem Energy has been actively introducing strategic investors, optimizing capital structure, and improving governance efficiency to holistically build itself into a central pillar of strength for the high-quality development of Sinochem Group.

The SBU of Energy has successively reorganized the major businesses and assets at home and abroad under its management to the platform company since 2017. Later in June 2018, the joint-stock transformation was completed and Sinochem Energy Co., Ltd. was established. In the same year, Sinochem Energy applied to be shortlisted in “top 100 enterprises by sales volume and top 100 enterprises by growth potential” in the reform of SOEs to actively foster the exemplary and driving effect with equity diversification as the core leverage to promote the reform of SOEs.

In 2019, notwithstanding the complex and changeable macroeconomy externally intensified intra-industry competition and cyclical fluctuations, Sinochem Energy firmly initiated the work to introduce strategic investors.

On October 14, 2019, the capital increase project of Sinochem Energy was listed at China Beijing Equity Exchange, receiving market enthusiasm and extensive recognition from institutional investors.

On December 9, 2019, the project completed listed trading, planning to introduce five investors and in turn, Sinochem Energy released 20% of its shares. In this way, the project has also become the largest one of its kind among “top 100 enterprises by sales volume and top 100 enterprises by growth potential” in the reform of SOEs.

Beyond laying a good foundation for constantly deepening the reform, the investor introduction this time will help build a more market-oriented management mechanism and lift the allocation and operation efficiency of state-owned capital.

According to Mr. Jiang Zhenghong, Vice General Manager of Sinochem Group and President of Sinochem Energy, Sinochem Energy will take the capital increase strategic partnership project as an opportunity to fully cooperate in the reform of SOEs, ensure value preservation and appreciation of state-owned capital, and actively advance the major strategic projects including the phase II and phase III construction of Sinochem Quanzhou Petrochemical project.

Mr. Yang Hua, General Manager of Sinochem Group and Chairman of Sinochem Energy, stated that, Sinochem Energy has completed the joint-stock reform, been shortlisted in “top 100 enterprises by sales volume and top 100 enterprises by growth potential” in the reform of SOEs, and introduced five strategic investors, which fully proves that its development strategy is up to the trend of energy industry, the reform of SOEs, and the investment direction in the capital market. Sinochem Energy is confident and capable of contributing to the healthy development of the national energy industry, actively exploring the deepening of the reform of SOEs, and safeguarding the core interests of shareholders.

Mr. Frank Ning, Secretary of the Leading Party Members’ Group of Sinochem Group and Chairman of Sinochem Group, pointed out that, from the perspective of national development, Sinochem Energy will further focus on promoting the system reform, stimulating vitality, power and creativity based on market needs, leveraging capital investment, and creating added value.

He also stressed that from the perspective of the capital market, Sinochem Energy should draw near and integrate into the capital market to bring more benefits and value to both the society and the market. From the perspective of internal cooperation, Sinochem Group will continue to support Sinochem Energy to explore innovative system and mechanism, and support the development of Sinochem Energy to the fullest extent permitted by laws and regulations.

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