Sinopec tumbles on surprise sale of HK$24b shares at huge discount
Stock drops 6.4 per cent after the oil-refining giant upsets the market by selling HK$24 billion of shares to select investors at a big discount
China Petroleum & Chemical (Sinopec) saw its share price fall 6.4 per cent yesterday after it announced a surprise HK$24 billion sale of shares to a small number of select investors at a big discount.
The world's second-largest crude oil refiner by capacity said on Monday night it had hired Goldman Sachs as the global co-ordinator of its sale of 2.84 billion new H shares at HK$8.45 each, a 9.5 per cent discount to Monday's close of HK$9.34. The stock closed yesterday at HK$8.74.
The shares, representing 17 per cent of the existing number of H shares, would be sold to between six and 10 "qualified" independent investors, Sinopec said. It did not name them.
Unnamed sources said Chinese Estates and sovereign wealth funds were among the buyers. Chinese Estates was not available for comment.
Sinopec said the proceeds from the sale would be used "for general corporate purposes".
"The timing [of the share sale], the magnitude of the discount and the decision to offer to a small group of shareholders surprised us," Sanford Bernstein analysts wrote in a research report. "[This is] a major disappointment to minority shareholders and us alike. The timing and selective approach … is difficult to fully understand."