Equity Financing

Sinochem Hong Kong plans sale roadshow

PUBLISHED : Wednesday, 06 July, 2005, 12:00am
UPDATED : Wednesday, 06 July, 2005, 12:00am

Sinochem Hong Kong Holdings will launch an international roadshow in two weeks to market its new share offering, sources said.


The company will issue no more than 3.9 billion new shares at 10 cents or higher, according to a shareholder circular.


The share placement's price will be determined through a book-building exercise and the shares will be issued by July 28.


Shareholders yesterday approved the $5.05 billion acquisition of fertiliser assets from ultimate parent Sinochem Corp, the mainland's largest petroleum, chemicals and fertiliser trading firm.


The acquisition, to be paid for by issuing to immediate parent Sinochem HK 50.5 billion shares at 10 cents each, will dilute existing independent shareholders' stake from 68.59 per cent to 4.66 per cent and leave Sinochem HK with a 94.65 per cent interest.


The deal will allow Sinochem Hong Kong to turn a net loss of $101.9 million for last year into a net profit this year of at least $633 million, which will be guaranteed by Sinochem HK.


The assets Sinochem Hong Kong is acquiring come with outstanding borrowings of 2.39 billion yuan as of April.


At the end of last year, the assets' bank borrowings-to-equity ratio stood at 93.1 per cent.


Interest expense amounted to 50.11 million yuan last year, compared with a net profit of 543.36 million yuan.


Canada's PotashCorp has agreed to buy existing Sinochem Hong Kong shares amounting to a 9.99 per cent stake.