China's Sinopec Oil Drops Spinoff Hints as Rumor Mill Churns
BEIJING ( TheStreet) -- A strict interpretation of China's much-feared law against "spreading rumors" could theoretically land a few stock analysts in the slammer for comments about the latest news from Sinopec
But law enforcers who play fair could also point an accusing finger at Sinopec, a state-run petrochemical conglomerate whose Tuesday announcement of "progress on the sale of businesses and restructuring" sparked wild market chatter.
Sinopec's statement released in Beijing added few new details and did little to flesh out previous announcements about its plans to spin off certain non-core assets such as gas stations this year. The latest statement neither set a timetable nor hinted at any potential buyers.
Some stock analysts in China reacted by speculating that potential investors might include Internet giant Tencent
The spinoff plan has been brewing since last fall as part of a government "state-owned enterprise reform" project. Sinopec and other state-owned champions have been told to seek private investors for minority stakes or to buy certain non-strategic assets. Up to 80% of the assets in some state companies could be sold to private investors over the next few years.
Sinopec said it will consider letting investors, including overseas firms, buy its nationwide network 30,351 gas stations -- about 32% of the country's total -- and its 23,431 convenience shops. Another asset that could be put on the block is a customer fuel-payment system with about 80 million cardholders.
Also, the company said it had launched a related restructuring of its international lubricants business by forming a new subsidiary and inviting outside investors.
Sinopec has not said how it might choose investors -- neither when nor how decisions might be made. Government officials suggested earlier this year that the gas stations would be sold off before May. Some market watchers had predicted an April sale. The company did not comment on that speculation, which proved wrong.
The latest announcement suggests Sinopec executives may have given themselves ample room for negotiating with potential investors. For example, it says any new investment must "benefit most of the Chinese public," and that the size and timing of an asset sale would be "determined based on market conditions."
It's unclear whether the Chinese government plans to sell any portions of its other oil conglomerates, PetroChina