Leading the reform of state-owned enterprises, China Petroleum and Chemical Corp. (Sinopec) (00386.HK, 600028.CN) expects to complete its business restructuring that will allow the entry of private capital by the end of the third quarter, chairman Fu Chengyu said Monday.
Private capital will give the company a new impetus to grow the business, he said.
By the end of the month, Sinopec expects to complete the spin-off of its convenience store business into a limited company and finish an evaluation of its assets by the end of June.
“We will then announce details about the entry of private capital,” Fu said.
Private entities could start investing in the company as early as July until the end of the third quarter, he said. These will include strategic investors that can complement the company’s strengths in technical support, management and new business.
Financial investors are welcome, as well as non-oil and domestic investors, Fu said.
Sinopec’s oil and gas distribution business is worth about 300 billion yuan (US$48.4 billion). Private investors are allowed to take up to 30 percent.
The money raised from private investors will be used to boost the company’s capital base, pay down debt, boost production of shale gas and improve environmental and safety standards.
The company plans to ramp up its annual production of shale gas to 5 billion cubic meters by 2015 and 10 billion cubic meters by 2017, Fu said.
He expects China to reach its shale gas production target of 60 billion cubic meters by 2020.
Cabinet points way to streamlined mergers
The State Council has issued guidelines to simplify coporate approvals to encourage companies to merge and restructure, news website China.com reported Monday. The changes mean that firms that acquire unrelated companies do not have to make promises on financial performance, the report said.
They will also expand access for private capital. The China Securities Regulatory Commission is also working with government departments to launch a new approval process this year to allow applications for mergers to be approved in a parallel manner rather than sequentially, the report said.
PBoC sets boundaries for online finance
The central bank has unveiled five major principles for regulating online finance, asking operators to stick to the core of financial services and limit their innovation to a reasonable range and strength, the Shanghai Securities News reported Tuesday, citing an unnamed central bank official.
Innovation in online finance should comply with the need for macroeconomic control and financial stability, preserve consumers’ legal rights, encourage a fairly competitive market and be subject to strict self-discipline, according to the People’s Bank of China.
The central bank will also allow online payments via code scanning and virtual credit cards to resume on a trial basis once related security and technical standards are in place, the official said, stressing that its earlier action is a suspension, not a termination of those payment forms.
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