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Sinopec units suspended from trading, restructuring expected
May 28, 2014 / 6:05 AM / 4 years ago

Sinopec units suspended from trading, restructuring expected

HONG KONG, May 28 (Reuters) - Shares of two listed units of Chinese oil giant Sinopec Group - drilling equipment maker Kingdream and Sinopec Yizheng Chemical Fibre Co Ltd 1033.HK - were suspended from trading on Wednesday, pending announcements on transactions related to their parent.

Shanghai-based Yizheng said in a filing with the Hong Kong stock exchange it had received notice from Sinopec Group that the state-owned giant was “planning a material transaction related to the company.”

Shenzhen-listed Kingdream made a similar stock exchange announcement, saying its shares were suspended from trading pending a notice about a significant matter from its ultimate controlling shareholder - Sinopec Group.

No further details were given. Neither Sinopec Group nor Yizheng and Kingdream could be reached for comment.

The suspension fuelled speculation among securities analysts that the two listed companies were planning asset restructuring, such as asset injections, involving Sinopec Group.

In its 2013 annual report, Kingdream said Sinopec Group had promised eventually to inject its “quality manufacturing assets” into the Shenzhen-listed company, making Kingdream Sinopec Group’s hub for making oil-drilling equipment.

Sinopec Group, headed by ambitious chairman Fu Chengyu, is also the parent of Sinopec Corp , Asia’s largest oil refiner.

It floated its construction and engineering unit Sinopec Engineering in Hong Kong last year and is currently restructuring its oil service businesses ahead of an overseas listing.

Earlier this year, Fu announced a plan to sell up to 30 percent of Sinopec Corp’s retail assets - including more than 30,000 petrol stations across China - in a multi-billion dollar restructuring. (Reporting by Charlie Zhu, Twinnie Siu and Alison Leung; Editing by Eric Meijer)

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