BP dumps Sinopec stake
The global giant says the sale was no reflection of their corporate relationship
Global oil giant BP has sold its entire 2.1 per cent stake in Sinopec Corp, China's second-largest oil producer, for HK$5.73 billion in a move which reduced its H-share investment portfolio.
A BP spokesman said yesterday the deal had been struck to reap huge gains in the stock of Sinopec, or China Petroleum and Chemical Corp, and was no reflection on their corporate relationship.
BP realised a windfall of about HK$11 billion from the Sinopec deal and last month's sale of its entire 2 per cent stake in PetroChina, the mainland's largest oil producer.
BP acquired its H-share stakes in Sinopec's initial public offering in 2000 and PetroChina's debut in 2001.
BP said it would retain its stake in Sinopec Zhenhai Refining & Chemical.
'The sales are a financial decision as their share prices have appreciated considerably,' BP spokesman David Nicholas said. 'They were two very successful equity investments, which helped us financially and helped build relationship with the companies.
'We remain committed to our joint ventures with the companies and China.'
After the market closed yesterday, BP, through Morgan Stanley, offered to sell 1.82 billion Sinopec shares at HK$3.15 each. The sale price represented a 0.78 per cent discount to yesterday's close of $3.175, which Morgan Stanley described as a record low discount in Asian share placements.
However, the price was a 98.11 per cent premium to the HK$1.59 per share BP paid in 2000. Rumours of the sale knocked 5.92 per cent off Sinopec's share price yesterday.
BP realised a HK$2.87 billion profit as a result of the Sinopec sale. However, it pocketed a much bigger gain at $8.49 billion four weeks ago when offloading its interest in PetroChina for $12.98 billion.
BP yesterday reported that earnings jumped 42 per cent to US$12.38 billion last year.
