CNPC stock soars 100pc on oil stake

Shares in oil explorer CNPC (Hong Kong) surged 100 per cent yesterday, fuelled by its $510.18 million purchase of a 54 per cent stake in an oil field in China.

The loss-making company, formerly Paragon Holdings, soared to 27.5 cents - its peak for the past two years after trading resumed yesterday. It was also the most heavily traded stock, with 51.56 million shares changing hands.

CNPC (Hong Kong) plans to fund the purchase by raising $152.02 million through an issue of 1.08 billion new shares priced at 14 cents, while the remaining $327.1 million will by paid by late 1997-98.

The new shares, accounting for 28.51 per cent of enlarged share capital, will be sold to Sun World, a wholly-owned subsidiary of state-owned China National Petroleum Corp (CNPC).

After the share sale, CNPC will see its 51.74 per cent stake in CNPC (Hong Kong) boosted to 65.5 per cent.

Under the purchase agreement, the oil field will become 46 per cent owned by the parent.