UPDATE 1-Sinopec to sell $3.1 bln in new stock, shares fall
* Sinopec shares sold at 9.5 pct discount to Monday's close
* Asia's largest refiner raises funds for business development
* Stock falls around 7 percent in early Tuesday trade
HONG KONG, Feb 5 (Reuters) - China Petroleum & Chemical Corp (Sinopec), Asia's largest refiner, said it plans to raise about $3.1 billion in a share offering to fund its business development, sending its shares sharply lower as investors fretted about the volume of new stock in the market.
Sinopec agreed to sell 2.85 billion new Hong Kong-traded shares at HK$8.45 each, a 9.5 percent discount to Monday's close and 7.4 percent below the average closing price over the past 30 days, the company said in a filing to the Hong Kong stock exchange late on Monday.
The stock fell as much as 7.1 percent in early trade on Tuesday to HK$8.68, but held above the placement price. Sinopec's Shanghai-traded shares were down 3.1 percent.
The shares were sold to a group of about 10 investors that included some of the world's largest institutional investors and global fund managers, a source familiar with the transaction told Reuters.
Sinopec said in its filing that the deal would help the company "enrich its shareholder base by attracting a number of high caliber investors to participate in the placing." It gave no further description of the buyers.
Proceeds from the offering would be used "as general working capital to fund the business development of the company," Sinopec said.
The refiner has been looking to buy overseas assets from its parent Sinopec Group to boost oil and gas production. Fu Chengyu, chairman of Sinopec Group, said last year Sinopec Corp. could raise funds from the market to help fund those acquisitions.
Goldman Sachs acted as sole global coordinator and bookrunner for the deal.