Assets listing ties in with consolidation

By Ding Yining and Leo Zhang  |   2008-7-4  |     NEWSPAPER EDITION

SHANGHAI Coking & Chemical Corp will list all its assets through a chemical firm traded in Shanghai as part of the city government's efforts to consolidate state assets to bolster competitiveness.

Shanghai 3F New Materials Co will issue new stocks to three shareholders of Shanghai Coking to buy 100 percent of the firm in a deal worth about 6.2 billion yuan (US$912 million), 3F said in an exchange filing yesterday.

Shanghai Huayi Group Co, the biggest petrochemical firm controlled by the city government, owns 71.73 percent of Shanghai Coking. China Cinda Asset Management and China Huarong Asset Management hold the remaining stake.

3F is expected to issue 650 million new shares to the three companies at 9.59 yuan each, according to the statement. Shares of 3F jumped 5.43 percent to close at 9.90 yuan yesterday.

The Shanghai government has been accelerating its pace to encourage state-owned enterprises in the city to restructure and list stocks to beef up their strength amid tough competition.

"The listing of quality assets will help boost the value of the public company," said Liu Yu, an Orient Securities Co trader. "Shanghai Coking has an apparent advantage in the methanol business over its peers."

Shanghai Coking has a yearly production capacity of 350,000 tons of methanol, the filing said. An additional 450,000-ton capacity will be put into operation this year, according to the filing.

The average sales price of methanol increased by more than 30 percent in the first half of this year from the same period last year and is set to continue to rise in the next three years, the filing said.

Shanghai Coking's net profit rose to 230 million yuan in 2007, up from 180 million yuan in 2006.