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Sinopec To Raise $3.1 Bln In Share Sale; Stock Plunges

China Petroleum & Chemical Corp. (SNP), popularly known as Sinopec, plans to raise about HK$24 billion or about $3.1 billion, by offering 2.85 billion Hong Kong-traded shares, the company said in a filing with the Hong Kong Stock Exchange. The stock dropped over 7 percent to close trading on the New York Stock Exchange.

The HK$8.45 per share offers a discount of 9.5 percent to the closing price of HK$9.34 per H share
on February 4. The shares to be offered represent 17 percent of the existing number of H shares in issue, the state-owned firm said.

Gross proceeds from the placing are expected to be about HK$24.04 billion and the aggregate net proceeds are estimated to be around HK$23.97 billion.

Sinopec said the net proceeds from the placement are to be used for general corporate purposes.

China's state-owned oil companies are scouting for new oil and gas assets amid rising demand from the world's second-largest economy. Beijing-based Sinopec is the largest producer and supplier of oil products in Asia.

In last November, French oil giant Total SA (TOT, TTFNF.PK, TTA.L) agreed to sell its 20 percent stake in a large Nigerian oil block to Sinopec. In last July, Canadian oil and gas producer Talisman Energy Inc. (TLM, TLM.TO) agreed to sell a 49 percent stake in its UK North Sea business to Sinopec for $1.5 billion.

SNP fell 7.2 percent to close at $112.57 on Monday.

by RTT Staff Writer

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