China will today put its largest oil and gas producer onto world markets in a global share offering to raise $3.1 billion (€3.2 billion), making it the largest public offering ever by a Chinese company.
It represents a bold attempt to inject cash into an old and troubled oil industry following the failure of several piecemeal efforts by Chinese refineries and energy producers to secure overseas funding for modernisation.
Petro-China, the listing arm of China's largest oil and gas producer, China National Oil Corporation (CNOC), announced details of its offer in Hong Kong yesterday.
At a press briefing, Petro-China chairman Mr Ma Fucai said 60 per cent of the funds raised would be for capital expenditure, exploration and production, improving the Daqing oil fields, building the east-west (gas) pipeline, retail and marketing, and the rest would be used to pay debts and laid-off workers.
The offering has attracted some controversy. Last week protesters in New York forced the lead co-underwriter to abandon presentation plans in a Manhattan hotel and move elsewhere. The demonstrators were protesting largely about the parent company's links with Sudan, against which the US is currently imposing sanctions.
The offer will test the attractiveness of a troubled stateowned enterprise in markets infatuated with high technology stocks. The global offering comprises four tranches. The Hong Kong public offer will involve 879.12 million shares, or five per cent of the global offer.
An Asia offering to institutional investors will make up 35 per cent of the global offer, a US offering 25 per cent, and a European offering 35 per cent. BP Amoco will take a 20 per cent stake in the global offer or up to a maximum of $1 billion.
