Chinese oil giant Sinopec will sell a 30 percent stake in its marketing arm to outside investors for more than $17 billion, the company said, as the government pushes key economic reforms. China's Communist Party pledged at a meeting in November to allow the market to play a "decisive" role in the allocation of resources through a number of policies, including prodding state companies to operate on more commercial terms. The move by Sinopec, initially proposed by the firm in February, has been hailed by state media as the first among the nation's three largest energy firms to introduce more diversified ownership.
"The sale of its marketing arm "is in line with their policy of privatisation and to introduce more private capital in the economy", independent financial analyst Francis Lun told AFP.
Separately, Sinopec parent China Petrochemical Corp will purchase assets from Sinopec Yizheng Chemical Fibre Company, worth 6.49 billion yuan ($1.06 billion), both firms said. The move is part of a plan by China Petrochemical to float its oilfield assets without the cost of a separate listing.
However, investors were not impressed. In Shanghai, Sinopec was down 0.71 percent at the close on September 15, while its Hong Kong-listed shares sank 6.76 percent.
But Yizheng Chemical's shares soared more than 80 percent in Hong Kong, while the benchmark Hang Seng Index fell 0.97 percent.
"It's purchasing assets from Yizheng Chemicals that are losing money, that's something that the market doesn't like," Simsen International Financial Group associate director Jackson Wong told AFP.
Yizheng saw a net loss of 1.75 billion yuan in the first half of the year.
Under the terms for Sinopec's marketing arm, 25 investors will buy a combined 29.99 percent share in the marketing company, leaving Sinopec with 70.01 percent, for 107.09 billion yuan ($17.42 billion), Sinopec said in a statement to the Hong Kong stock exchange.
The marketing unit is engaged in the distribution of petrol, diesel and jet fuel through more than 30,000 service stations, it said.
The stakeholders were mainly Chinese investment firms and insurance companies, including vehicles of Shanghai-based conglomerate Fosun, Internet giant Tencent and China Life Insurance Co, the list showed.
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