Sinopec, Asia's largest crude oil refiner and China's largest petrochemicals maker, is poised to spend more than 11.82 billion yuan to buy out shareholders of four A-share subsidiaries. The deals would improve efficiency and governance, the company said, since they would cut out connected transactions and listing rules compliance costs. They would also save the company the trouble of having to transform non-tradable state shares into tradable ones, it said. Sinopec has yet to reform the non-tradable shares in any of its A-share subsidiaries. In statements to the stock exchanges in Shanghai and Shenzhen, Sinopec Qilu, Sinopec Yangzi Petrochemical, Sinopec Zhongyuan Petroleum and Sinopec Shengli Oil Field Dynamic Group said their shares were suspended from trading pending announcement of certain 'major news'. 'We are planning to privatise these four companies, and the detailed scheme has been handed to the board for approval,' a senior Sinopec official said. The terms of the offer are expected to be announced within 10 days, another Sinopec official said. The share prices of the four subsidiaries have soared between 13.76 per cent and 41.1 per cent in the past three months amid speculation of the impending privatisation deals, but Sinopec has not baulked at the high prices. 'They have to do it now because of the non-tradable share reform scheme. They don't want to have to compensate investors, and if they wait any longer the prices will continue to rise,' said one petrochemicals analyst. When Sinopec was listed in 2000, management promised shareholders it would take its 14 listed subsidiaries private gradually to enhance efficiency and cut connected transactions. It has already rid itself of four listing vehicles either by privatisation or asset swaps. Daiwa Securities analyst Rachel Tsang Wai-ming said she expected Sinopec to offer an average 10 per cent premium to the four subsidiaries' last traded prices. Based on those figures, the subsidiaries' publicly traded shares not held by Sinopec are valued collectively at 11.82 billion yuan. Ms Tsang said given that Sinopec had recently received a 9.41 billion yuan handout from the central government as compensation for losses it sustained due to the state's refined oil price controls, it should not have difficulty in funding the privatisation by cash. Its gearing ratio stands at about 45 per cent. If Sinopec completes the privatisation of the four units, it will have six listed subsidiaries remaining. These are red-chip Sinopec Kantons Holdings, A-shares Sinopec Shijiazhuang Refining Chemical, Sinopec Wuhan Petroleum Group, and Sinopec Shandong Taishan Petroleum, as well as Sinopec Shanghai Petrochemical and Sinopec Yizheng Chemical Fibre which have both A and H shares. Privatising all of its remaining subsidiaries could cost Sinopec at least 21.97 billion yuan based on yesterday's closing prices.