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SCMP Reporter

Yangzi Petrochemical Corp - the largest of the five members of newly established China Eastern United Petrochemical Group - is seeking to raise about two billion yuan (about HK$1.85 billion) through an A-share listing, sources said.

 The proceeds would be used to fund Yangzi's 30 billion yuan petrochemical joint venture with Germany's BASF.

 The A-share listing has been approved by Beijing in principle and must now be passed by the China Securities Regulatory Commission.

 A source said the company was confident the flotation would proceed next month, as the listing had already appeared on the mainland's listing schedule for the year.

 'We made a net profit of 590 million yuan in the first six months, compared with a target of 900 million yuan for whole year,' the source said.

 'We are confident we will be able to meet the set target and even surpass it.'  Yangzi's partners in China Eastern United, which was formed by merging five of the mainland's largest petrochemical firms, are: Jinling Petrochemical, Nanjing Chemical, Jiangsu Petroleum and H share Yizheng Chemical's parent, Yihua Group. All five are based in Jiangsu province.

  The proceeds raised from the listing will form just part of the financing required for the joint venture with BASF, which will see both parties taking an equal share, the source said.

 The source said Yangzi might take 12.5 per cent in the BASF project with the remaining 37.5 per cent being taken by Yangzi's parent company.

 'We can raise the rest of capital through internal financial arrangements,' the source said.

 It is understood Vice-Premier Zhu Rongji gave the joint venture his approval when he met BASF's president in Beijing this week.



Yangzi Petrochemical targets $1.85b from A-share listing