Sinochem renews bid to take over Korean refinery

PUBLISHED : Wednesday, 13 July, 2005, 12:00am
UPDATED : Wednesday, 13 July, 2005, 12:00am

Chinese state-run Sinochem Corp is one of a dozen entities from South Korea and overseas that have expressed intent to bid for Incheon Oil Refinery, according to officials at Incheon District Court.

They said other bidders included subsidiaries of Citigroup and local refiners SK Corp, GS Caltex and S-Oil, Yonhap newswire reported yesterday. Incheon officials gave no further details.

The renewed auction comes after Incheon's creditors, led by Citigroup, rejected a 680 billion won ($5.09 billion) offer from Sinochem for the refiner in January, saying the offer was too small. Local press reports suggested creditors expected at least 750 billion won.

Incheon went bankrupt in 2001 and is now under court receivership. Its sales rose 28 per cent to 2.5 trillion won last year, while operating profit soared to 164.5 billion won thanks to international oil price increases.

A preferred bidder is expected to be chosen by August 18 and a sale to take place in September.

Mainland companies are aggressively chasing overseas firms in the energy sector as annual demand for energy rises about 7 per cent in the country. Analysts say Incheon Oil is geographically well placed for the China market, being located on the Yellow Sea coast.

Last year, BOE Technology acquired Hydis Displays and Shanghai Automotive Industry Corp took a controlling stake in Ssangyong Motor.