Chinese oil champion Sinopec is selling a $17.4 billion stake in its retail unit to a large group of mostly domestic investors as the country tries to reform its sprawling state-owned enterprises.
The 29.99 percent stake sale – to investors including tech group Tencent, private conglomerate Fosun and China Life Insurance – was considered a precedent-setting deal in China's efforts to realize value in its SOEs, while also improving their performance.
But the deal, announced on Sunday, is far from the opening of the oil sector to outside forces that reformers had sought. Sinopec has ceded no control of its lucrative business while raising funds from a sprawling club of state-owned enterprises, leading private groups, pension funds and other Chinese investors.
The list of investors also includes Haier, a Chinese white goods maker; Hopu, a Chinese private equity group; Bank of China and ICBC, the giant state-owned banks; CICC, a domestic investment bank; and Cinda Asset Management, the state-controlled"bad bank" asset manager.
RRJ, a fund owned by Malaysian deal maker Richard Ong, stands out as the only non-Chinese direct investor.
About two years ago China said outside capital would be allowed to invest in strategic state sectors – an announcement welcomed by some as opening the door to more private investment in closely held industries.