January 23, 2007 / 11:56 PM / 12 years ago

China's Changjiang Securities in backdoor listing

SHANGHAI, Jan 24 (Reuters) - China’s Changjiang Securities will achieve a backdoor listing through a merger with Shijiazhuang Petrochemical Co. Ltd. 000783.SZ, a unit of oil giant Sinopec Corp. (600028.SS), Shijiazhuang said on Wednesday.

The deal would value Changjiang at 10.3 billion yuan ($1.33 billion) and give the brokerage a 86.03 percent stake in the merged entity, said Shijiazhuang Petrochemical, which on Wednesday also announced a plan to separate from Sinopec to facilitate the Changjiang deal.

Under an agreement with Changjiang, Shijiazhuang Petrochemical will issue new shares to absorb the securities company, it said, adding that the deal requires regulatory approval.

Many Chinese securities and other financial companies are seeking backdoor stock market listings as faster and easier alternatives to the process of conducting initial public offers.

As part of a broad restructuring of Shijiazhuang Petrochemical, Sinopec Corp. (0386.HK) will acquire all of Shijiazhuang Petrochemical’s existing assets by assuming the unit’s debts as of the end of September, standing at 3.7 billion yuan, the statement said.

Shijiazhuang Petrochemical will repurchase Sinopec’s 79.73 percent stake in itself for 1 yuan, it said.

Changjiang Securities has just ended its partnership with France’s BNP Paribas (BNPP.PA) since the two companies had different views on the development of their joint venture in China.

BNP Paribas said in a joint statement this week that the French bank had decided to transfer to Changjiang Securities its 33 percent stake in Changjiang BNP Paribas Peregrine Securities Ltd., a local joint venture set up by BNP and Changjiang Securities.

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