Date
19 August 2017
Sinopec could raise US$10 billion by selling shares in its convenience-store and gas-station unit. Photo: Bloomberg
Sinopec could raise US$10 billion by selling shares in its convenience-store and gas-station unit. Photo: Bloomberg

Sinopec revives US$10 bln IPO plan for retail unit

China Petroleum & Chemical Corp. (Sinopec) has revived plans for an initial public offering of its gas-station and convenience-store unit, the Wall Street Journal reports, citing people familiar with the matter.

A deal could raise as much as US$10 billion.

The state-run oil firm is in talks with banks about launching a potential IPO of Sinopec Marketing Co. next year.

A listing in Hong Kong is being considered, although a final decision has not yet been made on the location of the IPO.

A potential listing of the unit — which is seen as a test case in China’s attempts to reform its lumbering state-owned enterprises — is one of the options being discussed as part of a broader restructuring.

Sinopec had originally planned to raise between US$5 billion and US$10 billion through an IPO of the unit in 2015, the Wall Street Journal reported at the time, although the process was delayed following the retirement of Fu Chengyu, the firm’s high-profile former chairman.

A listing of the unit would raise funds that Sinopec could invest in the stores attached to its gas stations, helping them become more profitable.

A listing in Hong Kong would also bring in more foreign investors that could press for better oversight and higher earnings for the assets, helping Beijing with its broader goal of overhauling bureaucratic, state-run companies.

Sinopec announced in September 2014 that it had sold a nearly 30 percent stake in Sinopec Marketing to 25 investors for 107.1 billion yuan (US$15.52 billion). More than half of the investors were incorporated in China, while the rest were incorporated offshore but related to Chinese entities.

Sinopec retained a 70.01 percent stake in the unit following the deal.

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