Sinopec sells 30pc stake in fuel unit for 107b yuan

China Petroleum & Chemical (Sinopec), the country's second-largest oil and gas producer, has secured commitment from 25 investors to buy 30 per cent of its fuel distribution unit for 107 billion yuan (HK$135 billion) in one of the biggest asset sales by a state firm to private and foreign investors and part of President Xi Jinping's state enterprise reform.

The proceeds would help the oil major cut debt and improve management of Sinopec Sales as it sought to make the fuel unit's operation more market-oriented through participation from new investors, Sinopec said in a filing to the Hong Kong stock exchange.

"The market-oriented reform of [Sinopec Sales] will enable Sinopec to further improve its [corporate governance and management], thus enhancing the competitiveness of the enterprise," it said.

The deals value Sinopec Sales at 357 billion yuan, and the 107 billion yuan - about US$17.4 billion - price tag is in line with analysts' estimates of US$15 billion to US$20 billion.

The investors are mostly domestic fund management firms outside the energy business. Privately owned natural gas distributor ENN Energy Holdings is an exception.