HONG KONG: Sinochem International Corp said it has put up its logistics unit for sale by public auction, aiming to raise about 3.5 billion yuan (US$530 million) - part of the Sinochem conglomerate’s efforts to respond to Beijing’s push for a slimmer state sector.Bidders for Sinochem International Logistics - also China’s largest liquid chemicals vessel owner with nearly 80 tankers - include a consortium comprised of Ordos City Junzheng Energy & Chemical Co Ltd and two other firms, the logistics firm’s parent company said in a filing late on Monday.The auction was launched in early November.Some Chinese private equity firms are also interested in the logistics unit, sources with knowledge of the talks said, adding that a deal is likely to be finalised before the end of the year.Sinochem is leaning towards picking the consortium over other suitors, said one source with direct knowledge of the matter. The other two firms in the consortium are Beijing Chunguang Land Real Estate Development Co Ltd and Beijing Huatai Xingnong Agriculture Science & Technology Co Ltd.Sinochem Group did not respond to a request for comment. The sources declined to be identified as they were not authorised to speak to the media.Beijing is keen to improve the efficiency of the state sector by injecting private capital and has launched so-called mixed-ownership reforms.Sinochem aims to abandon what its chairman, Frank Ning, recently described as ”scattered resource allocation” and transform itself into a conglomerate with a strong foundation in petrochemicals but with growth driven by its material science and life science businesses.Sinochem is also reviewing its struggling oil exploration and other less key businesses in what would amount to a major transformation for the oil and chemicals behemoth, sources have said previously.China’s State-Owned Asset Supervision and Administration Commission is pressuring all state-owned firms to concentrate on where they are most competitive, said one of the sources with knowledge of the talks.“The diversified conglomerates will probably start to shrink closer to their core businesses,” said the source.Reuters reported in October that Sinochem had tapped three banks including Morgan Stanley to work on a possible Hong Kong listing of its best oil assets.Sinochem International Logistics logged 4 billion yuan in revenue last year while net profit jumped 10% to 435 million yuan, its parent firm said in a filing last month.Established in 2010, the logistics unit is responsible for storing and transporting fuel and chemical goods including potentially flammable and dangerous ones.

Source: The Star December 05, 2017 07:30 UTC