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China's Sinochem planning up to $5.5 billion Shanghai IPO
November 10, 2011 / 7:42 AM / 6 years ago

China's Sinochem planning up to $5.5 billion Shanghai IPO

SHANGHAI (Reuters) - China’s Sinochem Corp plans to raise up to 35 billion yuan ($5.5 billion) via an initial public offering in Shanghai, in what would easily be the biggest IPO in the mainland market in the past year.

The firm, which has businesses ranging from oil exploration to chemicals to property, will use the proceeds to fund a refinery project in Quanzhou, it said in a filing posted on the environment ministry’s website on Thursday.

In July, Sinochem obtained approval from the environmental watchdog for the 240,000 barrel-per-day plant in the southeastern province of Fujian.

Sinochem plans to sell up to 26.5 billion new shares, or 40 percent of its enlarged capital, to raise 20-35 billion yuan through the IPO, it said.

Companies with operations that impact the environment, such as miners and oil refinery operators, first need to obtain clearance from the environment ministry before seeking approval from the securities regulator for IPOs.

IPOs on the mainland market have been dominated by smaller deals so far this year, with the biggest deal being Sinohydro’s $2.1 billion fundraising last month.

Companies raised about $34.9 billion from first-time share sales in the first nine months of the year on the Shanghai and Shenzhen exchanges, down 37 percent from a year earlier, Thomson Reuters data showed.

Still, companies such as New China Life Insurance Co, China Communications Construction Co (1800.HK) and Shaanxi Coal Industry Co are pushing ahead with IPO plans worth billions of dollars in the coming months, further testing demand in a market where investors have turned more cautious about new listings.

The benchmark Shanghai stock index .SSEC has fallen 11.7 percent so far this year.

Sinochem Corp was established in 2009 as the result of a group restructuring of Sinochem Group, which owns four listed units including Sinochem International Corp (600500.SS), Sinofert Holdings Ltd (0297.HK), Franshion Properties (China)Ltd (0817.HK) and Far East Horizon Ltd (3360.HK).

Sinochem Group currently has a 98 percent stake in Sinochem Corp.

Editing by Jason Subler

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