December 4, 2011 [Reuters] - Sinopec Kantons Holding Ltd plans to raise up to HK$3.5 billion ($450 million) via a rights issue to fund its acquisition of equity interests in five joint ventures from its parent China Petroleum & Chemical Corp (Sinopec) , sending its stock down to a more than one-week low.
The company said it would buy stakes in the five joint ventures for 1.81 billion yuan ($284.60 million) as it moves to create one of Asia’s largest oil terminal businesses and tap China’s long-term energy growth consumption trend.
Upon completion of the acquisition, the number of crude oil terminals controlled or jointly owned by the company will rise to seven from two, and the number of berths increase to 24 from 14, it said in a filing to the Hong Kong bourse late on Sunday.
The annual design capacity of its crude oil terminals will rise to about 225 million tonnes from about 85 million tonnes, enabling the company to become the largest service provider of crude oil terminals in China and one of the largest in Asia, it said.
“This will strengthen the group’s competitive advantage, significantly enhance core competencies, increase profitability, as well as position the company for the future overseas expansion of its oil terminal and storage business,” it added.
Sinopec Kantons said it planned to issue one rights share for every existing share held, and the proceeds would also be used for the development and operation of crude oil terminals and the provision of logistics operations, and for working capital.
For the statement, click here
Shares of Sinopec Kantons fell 8.9 percent by 0226 GMT on Monday, their lowest since Nov. 24. That compared with a 0.46 percent gain in the broader market. ($1 = 6.3597 yuan)
