BEIJING YANHUA<0325>,SHANGHAI PECHEM<0338>,YIZHENG CHEM<1033> & ZHENHAI REFIN<1128> - Joint Announcement
The Stock Exchange of Hong Kong Limited ("Stock Exchange") takes no
responsibility for the contents of this announcement, makes no
representation as to its accuracy or completeness and expressly disclaims
any liability whatsoever for any loss howsoever arising from or in
reliance upon the whole or any part of the contents of this announcement.
Beijing Yanhua Petrochemical Shanghai Petrochemical
Company Limited Company Limited
(a joint stock limited company (a joint stock
incorporated in limited company incorporated
the People's Republic of China in the People's Republic of
with limited liability) China with limited liability)
Yizheng Chemical Fibre Zhenhai Refining and Chemical
Company Limited Company Limited
(a joint stock limited company (a joint stock
incorporated in limited company incorporated
the People's Republic of China in the People's Republic of
with limited liability) China with limited liability)
ANNOUNCEMENT
This announcement is jointly issued by the boards of directors of Beijing
Yanhua Petrochemical Company Limited ("Beijing Yanhua"), Shanghai
Petrochemical Company Limited ("Shanghai Petrochemical"), Yizheng
Chemical Fibre Company Limited ("Yizheng Chemical"), and Zhenhai Refining
& Chemical Company Limited ("Zhenhai Refining") on a reorganisation of
their ultimate holding company, China Petrochemical Corporation ("PPC").
The reorganization was completed on 25 February 2000. Upon completion of
such reorganization, China Petroleum & Chemical Corporation ("Sinopec"), a
wholly owned subsidiary of CPC, has become the controlling shareholder (as
defined in the Rules Governing the Listing of Securities on the Stock
Exchange ("Listing Rules")) of each of Beijing Yanhua, Shanghai
Petrochemical, Yizheng Chemical, and Zhenhai Refining. Applications will
be made to the Executive (as defined in the Hong Kong Code on Takeovers
and Mergers ("Takeovers Code")) for waivers of any general offer
obligations.
Brief information on the reorganization
The board of directors of each of Beijing Yanhua, Shanghai Petrochemical,
Yizheng Chemical and Zhenhai Refining wishes to announce that CPC has
undergone a reorganization. Pursuant to the reorganization, Sinopec was
established on 25 February 2000 as a joint stock limited company in the
People's Republic of China ("PRC"), which is wholly owned by CPC. With
effect from that date, CPC either by itself or through its wholly owned
subsidiaries transferred to Sinopec certain assets and liabilities
including, without limitation to, the following:-
1. 2,362,000,000 State-owned shares of RMB1.00 each in the share
capital of Beijing Yanhua representing 70% of the entire issued share
capital of Beijing Yanhua;
2. 4,000,000,000 State-owned shares of RMB1.00 each in the share
capital of Shanghai Petrochemical representing 55.56% of the entire issued
share capital of Shanghai Petrochemical;
3. 1,680,000,000 State-owned shares of RMB1.00 each in the share
capital of Yizheng Chemical representing 42% of the entire issued share
capital of Yizheng Chemical; and
4. 1,800,000,000 State-owned shares of RMB1.00 each in the share
capital of Zhenhai Refining, representing 71.3% of the entire issued share
capital of Zhenhai Refining.
(For the following diagrams set out the corporate structure of CPC
immediately before and after the reorganization to the extent relating to
Beijing Yanhua, Shanghai Petrochemical, Yizheng Chemical and Zhenhai
Refining, please refer to the press announcement today)
By virtue of Rule 26.1(a) of the Takeovers Code, mandatory offer
obligations might (unless waived) be triggered upon the completion of the
reorganization. Note 6(b)(i) of the Notes to Rule 26.1 of the Takeovers
Code provides that the Executive would normally grant the acquirer (in
the present case, Sinopec) of 35% or more of the voting rights of a
company a waiver from a general offer obligation if the acquirer is a
member of a group of companies comprising a company and its subsidiaries
and the acquirer has acquired the voting rights from another member of
such group of companies.
On such basis, applications will be submitted to the Executive for waivers
of the obligations of Sinopec to make general offers to the H shareholders
of each of Beijing Yanhua, Shanghai Petrochemical, Yizheng Chemical and
Zhenhai Refining on the basis that the ultimate controlling shareholder
(as defined in the Listing Rules) of these companies before and after the
reorganization is still CPC and that CPC, Sinopec, Beijing Yanhua,
Shanghai Petrochemical, Yizheng Chemical and Zhenhai Refining are within
the same group of companies.
Connected Transactions and waivers granted by the Stock Exchange
Prior to the reorganization, each of Beijing Yanhua, Shanghai
Petrochemical, Yizheng Chemical and Zhenhai Refining has obtained certain
waivers from the Stock Exchange from strict compliance with certain
ongoing disclosure and shareholders' approval requirements under the
Listing Rules in relation to certain connected transactions. As a result
of the reorganization, such waivers may need to be modified. In addition,
certain transactions which were not connected transactions before the
reorganization may become connected transactions for Beijing Yanhua,
Shanghai Petrochemical, Yizheng Chemical or Zhenhai Refining following
the reorganization. CPC, Sinopec, Beijing Yanhua, Shanghai Petrochemical,
Yizheng Chemical and Zhenhai Refining are in discussion on the nature and
the anticipated amounts of such connected transactions and, if necessary,
will apply to the Stock Exchange for modifying the existing waivers or
for new waivers in relation to such connected transactions and, if
necessary, will apply to the Stock Exchange for modifying the existing
waivers or for new waivers in relation to such connected transactions.
Any connected transactions will be conducted in compliance with the
disclosure and shareholders' approval requirements (where necessary) of
the Listing Rules. Further particulars of such connected transactions and
the waivers will be announced by each of Beijing Yanhua, Shanghai
Petrochemical, Yizheng Chemical and Zhenhai Refining separately.
Principal business of Sinopec
The principal business activities of Sinopec include:
* exploring for and developing, producing and selling of, crude oil
and natural gas;
* processing of crude oil into refined products, buying and selling
refined products and transporting, distributing and marketing of refined
products; and
* producing and distributing petrochemical products.
Before the reorganization, CPC has given a written undertaking to each
of Beijing Yanhua, Shanghai Petrochemical, Yizheng Chemical and Zhenhai
Refining that it will treat them no less favourably than the other
enterprises directly or indirectly under its control. After the
reorganization, Sinopec will also give the same undertaking to each of
Beijing Yanhua, Shanghai Petrochemical, Yizheng Chemical and Zhenhai
Refining.
Suspension of trading of A shares of Shanghai Petrochemical and Yizheng
Chemical
The A shares of each of Shanghai Petrochemical and Yizheng Chemical are
also listed and traded on the Shanghai Stock Exchange. According to the
requirements of the Shanghai Stock Exchange, trading of the A shares of
each of Shanghai Petrochemical and Yizheng Chemical would be suspended for
half a trading day at the time of the release of this announcement.
Consequently, trading in A shares of each of Shanghai Petrochemical and
Yizheng Chemical on the Shanghai Stock Exchange would be suspended in the
morning of 28 February 2000.
By the order of the board By the order of
of directors of the board of directors of
Beijing Yanhua Petrochemical Shanghai Petrochemical
Company Limited Company Limited
Zhang Zhaomin Zhang Jingming
Company Secretary Company Secretary
By the order of the board By the order of
of directors of the board of directors of
Yizheng Chemical Fibre Zhenhai Refining &
Company Limited Chemical Company Limited
David J.Y.Shao Su Dewen
Company Secretary Company Secretary
Hong Kong, 25 February 2000
The directors of Beijing Yanhua jointly and severally accept full
responsibility for the accuracy of the information (other than the
information relating to Shanghai Petrochemical, Yizheng Chemical and
Zhenhai Refining) contained in this announcement and confirm, having made
all reasonable enquiries, that to the best of their knowledge, the
opinions expressed in this announcement (other than the opinions relating
to Shanghai Petrochemical, Yizheng Chemical and Zhenhai Refining) have
been arrived at after due and careful consideration and there are no other
facts not contained in this announcement the omission of which will make
any statements in this announcement misleading.
The directors of Shanghai Petrochemical jointly and severally accept full
responsibility for the accuracy of the information (other than the
information relating to Beijing Yanhua, Yizheng Chemical and Zhenhai
Refining) contained in this announcement and confirm, having made all
reasonable enquiries, that to the best of their knowledge, the opinions
expressed in this announcement (other than the opinions relating to
Beijing Yanhua, Yizheng Chemical and Zhenhai Refining) have been arrived
at after due and careful consideration and there are no other facts not
contained in this announcement the omission of which will make any
statements in this announcement misleading.
The directors of Yizheng Chemical jointly and severally accept full
responsibility for the accuracy of the information (other than the
information relating to Beijing Yanhua, Shanghai Petrochemical and Zhenhai
Refining) contained in this announcement and confirm, having made all
reasonable enquiries, that to the best of their knowledge, the opinions
expressed in this announcement (other than the opinions relating to
Beijing Yanhua, Shanghai Petrochemical and Zhenhai Refining) have been
arrived at after due and careful consideration and there are no other
facts not contained in this announcement the omission of which will make
any statements in this announcement misleading.
The directors of Zhenhai Refining jointly and severally accept full
responsibility for the accuracy of the information (other than the
information relating to Beijing Yanhua, Shanghai Petrochemical and Yizheng
Chemical) contained in this announcement and confirm, having made all
reasonable enquiries, that to the best of their knowledge, the opinions
expressed in this announcement (other than the opinions relating to
Beijing Yanhua, Shanghai Petrochemical and Yizheng Chemical) have been
arrived at after due and careful consideration and there are no other
facts not contained in this announcement the omission of which will make
any statements in this announcement misleading.
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