Sinopec Group Considers Listing of Its Engineering Units
China's Sinopec Group, parent of top Asian refiner Sinopec Corp, plans to restructure its downstream engineering and construction units before listing them in a public stock offering, industry officials said.
The state energy group aims to kick off the restructuring around the middle of next year, once its top management agrees to proceed.
Sinopec's design and engineering institutes as well as its construction outfits, have a total workforce of close to 50,000 with annual turnover of roughly 200 billion yuan ($31 billion).
A company official declined to predict the timeline for the initial stock offering or the size of the fund raising, saying the firm first must complete a complicated restructuring.
The listing plan was originally proposed by Sinopec's new chief, Fu Chengyu. Formerly head of China's offshore oil and gas company CNOOC, Fu last April took the helm at Sinopec Group, the country's second-largest energy giant after CNPC.
"Fu has the experience of listing CNOOC's oilfield service arm COSL, so he wants to apply it at Sinopec," said one official with knowledge of Sinopec's early restructuring plans.
"The restructuring part will be a big challenge as the service business is very scattered at Sinopec, and each unit has long established its own vested interests."
Among the units are Sinopec Engineering Incorporation (SEI) and Sinopec Luoyang Institute — both flagship design institutions that specialize in refining and petrochemical projects — and engineering and construction arms in Nanjing and Ningbo.
Last week, state-run Sinochem Corp, primarily an oil and chemicals trader with newly grown oil and gas production business, said it plans to raise up to 35 billion yuan ($5.5 billion) via an initial public offering in Shanghai, in what would be the biggest IPO in the mainland market in the past year.