Struggling Jilin Chemical Industrial is to buy the remaining 35 per cent stake in a petrochemical subsidiary from its joint-venture partner for 135 million yuan (about HK$126.53 million).
Jilin Chemical announced the acquisition as it reported that aggressive cost cutting had narrowed its interim net loss 47 per cent to 350.06 million yuan. The H-share subsidiary of China's No 1 oil producer PetroChina said it had agreed to buy the 35 per cent stake in Allied Petrochemicals from Millennium Group. It already has a 65 per cent stake.
In a separate announcement, Millennium said petrochemical-maker Allied's unaudited net assets were 369.3 million yuan, implying a 35 per cent stake was worth 129.2 million yuan.
Jilin Chemical company secretary Zhang Liyan declined to elaborate on the reason for the purchase but said it was a natural decision for the company being a petrochemical concern.
Allied's unaudited net profit rose 5.9 per cent year on year to 65.6 million yuan last year.
Jilin Chemical, labelled as a special treatment firm by the Shenzhen Stock Exchange, could be delisted if it does not return to the black shortly.