Sinopec gears up for public offering

Abstract

China Petrochemical Corp. (Sinopec) has hired investment bank Morgan Stanley and China International Capital Corp.—a joint venture between Morgan Stanley and China Construction Bank—as global coordinators of its first foreign public offering, worth as much as $5 billion. Sinopec is striving to list itself on stock markets in the U.S. and in Hong Kong within the coming year. To stoke the interest of foreign investors in Sinopec, much of the group's existing operations will have to be excluded from the listing. Sinopec provides food, lodging, schooling, and other social services to its employees. Reporting sales of $33 billion for the year ended Dec. 31, 1998, Sinopec's net profit after tax was a mere $193 million. The group is seriously overstaffed, employing 1.19 million people. Sources say that Morgan Stanley hopes to lead a Sinopec restructuring effort. Morgan Stanley says that it is not permitted to comment on its work. One observer familiar with China's ...