Sinopec to finance projects with issue of 30 bln yuan worth 6-yr bonds

29-Sep-07

In a move to fund its projects, Asia's largest refiner - China Petroleum & Chemical Corp (Sinopec) plans to issue 6-year bonds with warrants to the tune of 30 bln yuan. Proceeds from the bond issue will be invested in two ethylene plants in Tianjin in northern China and in Zhenhai in Zhejiang province with annual capacity of one mln tons each, delivering natural gas from Sichuan province in southwest China to the east coast. Some of the proceeds will also aid in paying back bank loans. Proceeds from the warrant issue will be invested in a Wuhan ethylene project, in some construction projects in Shengli oilfield and Tahe oilfield, and to help fund the Tianjin and Zhenhai ethylene plants. Sinopec will hold a shareholder meeting on Nov 15 to review the issue proposals. The company plans for subscribers to receive call warrants for every bond held, with two call warrants giving holders the option to buy one A-share. Both the coupon for the bonds and the option price for the warrants will be finalized at a later stage. Sinopec also plans to issue up to 20 bln yuan worth of fixed-rate bonds to finance a project to deliver natural gas from Sichuan to the east coast. The bonds will be issued in two equal tranches, and will include five-year bonds and 10-year bonds.