CHINA: SINOPEC SALE

China's largest oil refiner said it would consider both domestic and overseas investors when selling a minority stake in the state-owned company's retail fuel business.

China Petroleum & Chemical Corp., known as Sinopec, in a statement filed Monday with the Hong Kong Stock Exchange said that the retail business, Sinopec Sales Co., made a net profit of 25.1 billion yuan ($4 billion) last year. The retail subsidiary includes more than 30,000 gasoline stations and the 23,000 convenience stores that accompany them.

Sinopec said in February that it would allow outsiders to own no more than a 30% stake in Sinopec Sales. The announcement was applauded by many analysts and investors and followed a landmark reform blueprint that Chinese leaders released late last year calling for state-owned enterprises to bring in private investors in a bid to improve returns and efficiency.

In Monday's statement, the company outlined the criteria for the potential investors, saying it would consider overseas and domestic candidates, provided that none of their existing businesses or investments "significantly" conflict with Sinopec's core business. Sinopec said other factors it will weigh include the size of the investment, the investor's complementary strengths, its brand image, reputation and financial health, and the intended holding period of the investment.

Sinopec didn't disclose a timetable for the sale, but said it would conduct the partial sale of Sinopec Sales through "multiple rounds of selection and competitive negotiation." It ruled out a public offering of shares.

In March, Sinopec formed a new subsidiary, Sinopec Easy Joy Sales Co., within Sinopec Sales to house its convenience stores. The Wall Street Journal reported earlier this year that Sinopec was looking to publicly list Sinopec Easy Joy Sales Co. after selling the minority stake in Sinopec Sales to outsiders.

A spokeswoman for Sinopec said Tuesday that a decision to list the convenience-store unit will only be made after a private sale is completed and a new board of directors is formed.

wsj.com