Jan. 4, 2007 (China Knowledge) - China Petroleum & Chemical Corp (Sinopec), one of the largest energy and chemical companies in China, has agreed to sell a 46.24% stake in its subsidiary Sinopec Wuhan Petroleum Group for RMB 201.69 million as part of its restructuring process.

Sinopec would sell all its 67.91 million State shares in its Wuhan subsidiary to investment firm Shengshida Investment at RMB 2.97 each, priced at a premium of 12.5%. Sinopec Wuhan will then sell all its assets back to Sinopec for RMB 387.56 million, allowing Sinopec to cut out the listing unit but retain the petroleum operations. The selling price is based on the appraised value of the assets.

As part of the deal, Beijing-based Shengshida will also sell 90% of Beijing Rongfeng Real Estate Development to Sinopec Wuhan for RMB 266.97 million as a back-door listing for its property arm. The price is also based on its appraised value, which is 42.01% higher than its net asset value of RMB 187.99 million.

Sinopec’s recent deal is part of its efforts to restructure and reduce competition among its units. The company received a RMB 5 billion payout from the Chinese government after it suffered losses from its refining business last year.