China's energy markets are expected to open further following an announcement by Sinopec, the listed arm of China Petrochemical Corporation known as Sinopec Group, on Thursday, April 27, that it plans to initially approve the overseas listing of its marketing arm, Sinopec Marketing Co. Ltd.
According to China Daily, the planned listing would "further deepen the reform of systems and mechanisms, enhance the competitiveness and the overall enterprise value of the company."
Sinopec, however, said that the plan would still need to be approved by the marketing arm's board of directors and shareholders as well as by local and foreign regulatory authorities, which include the Assets Supervision and Administration Commission and the China Securities Regulatory Commission.
"Sinopec announced the introduction of private capital into our oil product marketing business in February 2014, the first among our peers to do so," Zhang Haichao, deputy general manager of Sinopec and chairman of Sinopec Marketing, said.
"The planned overseas listing of Sinopec Marketing marks another major milestone in our efforts to fully diversify the ownership of the marketing business, and will accelerate its strategic transformation from an oil product marketer to a comprehensive service provider," Zhang added.
Sinopec said that it will only offer 10 percent of the total share capital for its overseas-listed shares.
Sinopec and its marketing board of directors will negotiate and determine the final offering price for the shares. The proceeds from the listing will be used for the development of the marketing's businesses as well as for the improvement of its asset-liabilities structure.
Once the overseas listing is completed, the company will retain major shares in Sinopec Marketing, the report said.
The planned listing is expected to raise Sinopec Marketing's profitability and help improve the company's overall financial performance.
The marketing arm is mainly engaged in storage and logistics, retail and direct sales and distribution of petroleum products such as refined oil products, natural gas for automobile and fuel oil. It also develops and operates emerging business, such as convenience stores, e-commerce and auto services.