SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of December, 2004
China Petroleum & Chemical Corporation
A6, Huixindong Street,
Chaoyang District Beijing, 100029
People's Republic of China
Tel: (8610) 6499-0060
(Indicate by check mark whether the registrant files or will file
annual reports under cover of Form 20-F or Form 40-F.)
Form 20-F X Form 40-F
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(Indicate by check mark whether the registrant by furnishing the
information contained in this form is also thereby furnishing the information
to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act
of 1934. )
Yes No X
------ ------
(If "Yes" is marked, indicate below the file number assigned to
registrant in connection with Rule 12g3-2(b): 82-__________. )
N/A
This Form 6-K consists of:
Joint announcement on proposed privatisation of Sinopec Beijing Yanhua
Petrochemical Co., Ltd. ("Beijing Yanhua") by China Petroleum & Chemical
Corporation (the "Registrant") through Beijing Feitian Petrochemical Co., Ltd.
by way of merger absorption, jointly announced by the Registrant and Beijing
Yanhua on December 29, 2004 in English.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
China Petroleum & Chemical Corporation
By: /s/ Chen Ge
------------
Name: Chen Ge
Title: Secretary to the Board of Directors
Date: December 29, 2004
The Stock Exchange of Hong Kong Limited 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.
[GRAPHIC OMITTED] [GRAPHIC OMITTED]
CHINA PETROLEUM & CHEMICAL CORPORATION SINOPEC BEIJING YANHUA PETROCHEMICAL
(A joint stock limited company incorporated COMPANY LIMITED
in the People's Republic of China with (A joint stock limited company incorporated
limited liability) in thePeople's Republic of China with
(Stock code: 0386) limited liability)
(Stock code: 0325)
JOINT ANNOUNCEMENT
PROPOSED PRIVATISATION OF BEIJING YANHUA BY SINOPEC CORP.
THROUGH BEIJING FEITIAN
BY WAY OF MERGER BY ABSORPTION OF BEIJING YANHUA
UNDER ARTICLE 184 OF THE PRC COMPANY LAW
AT THE CANCELLATION PRICE OF HK$3.80 PER BEIJING YANHUA H SHARE
AND
RESUMPTION OF TRADING OF BEIJING YANHUA
Financial Advisers to Sinopec Corp.
[GRAPHIC OMITTED] [GRAPHIC OMITTED]
CICC Morgan Stanley
CHINA INTERNATIONAL CAPITAL
CORPORATION (HONG KONG) LIMITED
Financial Adviser to Beijing Yanhua
[GRAPHIC OMITTED]
Bear Stearns Asia Limited
Independent Financial Adviser to the Independent Board Committee
of Beijing Yanhua
[GRAPHIC OMITTED]
Lehman Brothers Asia Limited
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MERGER BY ABSORPTION
The Sinopec Directors and the Beijing Yanhua Directors jointly announce that
on 29th December 2004:
(a) Sinopec Corp.'s wholly owned subsidiary, Beijing Feitian, entered into
the Merger Agreement with Beijing Yanhua; and
(b) the Beijing Yanhua Directors agreed to put forward to the Beijing Yanhua
Shareholders the Proposal, which involves the cancellation of all the
Beijing Yanhua Shares.
Pursuant to the Proposal, Beijing Feitian will (i) pay the Cancellation Price
per Beijing Yanhua H Share in cash to the Beijing Yanhua H Shareholders for
the cancellation of all Beijing Yanhua H Shares, and (ii) issue
RMB4,163,335,400 of new registered capital of Beijing Feitian, representing an
amount equal to 70% of the NAV of Beijing Yanhua as at 31st December 2003, to
Sinopec Corp., being the sole holder of all the Beijing Yanhua Domestic
Shares. The Cancellation Price represents a premium of approximately 10.9%
over the closing price of HK$3.425 per Beijing Yanhua H Share as quoted on the
Hong Kong Stock Exchange on 21st December 2004 (being the last date of trading
prior to the suspension of trading of the Beijing Yanhua H Shares pending the
issue of this announcement).
The Proposal will be implemented by way of "merger by absorption" in
accordance with Article 184 of the PRC Company Law. The Proposal is
conditional upon the fulfilment (unless waived, as applicable) of the
Conditions as described in the section headed "Conditions of the Merger"
below. All Conditions will have to be fulfilled (unless waived, as applicable)
on or before 31st December 2005 (or such other date as Beijing Yanhua and
Beijing Feitian may agree). On the Delisting Date, the Beijing Yanhua Listing
will be withdrawn. Upon de-registration of Beijing Yanhua, Beijing Yanhua will
be dissolved and cease to exist.
The amount of cash consideration required to be paid by Beijing Feitian under
the Proposal is approximately HK$3,846 million.
Sinopec Corp. and Beijing Feitian intend to finance the cash consideration
required for the Proposal from existing banking facilities of Sinopec Corp.
granted by Bank of China and made available to Sinopec Corp. and its
subsidiaries. Each of CICC and Morgan Stanley, being a financial adviser to
Sinopec Corp., is satisfied that sufficient financial resources are available
to Sinopec Corp. and Beijing Feitian for the satisfaction of Beijing Feitian's
obligations under the Proposal.
Under PRC law, an approval from SAFE as set out in Condition (iv) under the
section headed "Conditions of the Merger" below is required for exchanging RMB
to pay the Cancellation Price and other fees incurred in connection with the
Merger.
SHAREHOLDING IN BEIJING YANHUA
As at the date of this announcement, Sinopec Corp. owned 2,362,000,000 Beijing
Yanhua Domestic Shares, representing approximately 70% of the issued share
capital of Beijing Yanhua and Beijing Yanhua H Shareholders were interested in
1,012,000,000 Beijing Yanhua H Shares, representing approximately 30% of the
issued share capital of Beijing Yanhua. As at the date of this announcement,
there were no outstanding options, warrants or convertible securities issued
by Beijing Yanhua.
DESPATCH OF THE COMPOSITE DOCUMENT
The Composite Document containing, inter alia, further details of the Proposal
and the Merger, the recommendation from the Independent Board Committee with
respect to the Proposal and the advice of the Independent Financial Adviser to
the Independent Board Committee, a notice of the Special General Meeting and a
notice of Special General Meeting of Independent Beijing Yanhua Shareholders
to approve the Proposal, will be despatched to the Beijing Yanhua Shareholders
as soon as practicable in compliance with PRC law, the Listing Rules and the
Takeovers Code.
SUSPENSION AND RESUMPTION OF TRADING OF BEIJING YANHUA H SHARES AND
BEIJING YANHUA ADSS
At the request of Beijing Yanhua, trading in the Beijing Yanhua H Shares on
the Hong Kong Stock Exchange was suspended from 9:30 a.m. on 22nd December
2004 pending the issue of this announcement. Trading in the Beijing Yanhua
ADSs on the New York Stock Exchange was also suspended from approximately
10:00 a.m. on 21st December 2004 (United States Eastern Standard Time).
Application has been made by Beijing Yanhua to the Hong Kong Stock Exchange
for the resumption of trading in the Beijing Yanhua H Shares with effect from
9:30 a.m. on 30th December 2004. Application will be made by Beijing Yanhua to
the New York Stock Exchange for the resumption of trading in Beijing Yanhua
ADSs with effect from 9:30 a.m. on 30th December 2004 (United States Eastern
Standard Time).
Shareholders of Sinopec Corp. and Beijing Yanhua and potential investors
should be aware that the implementation of the Proposal is subject to the
Conditions as set out below being fulfilled (or waived, as applicable), and
thus the Proposal may or may not become effective. They are advised to
exercise caution when dealing in the shares of Sinopec Corp. and Beijing
Yanhua respectively.
The Beijing Yanhua Directors intend that the Beijing Yanhua Listing will be
withdrawn if the Merger is implemented or be maintained in the event that the
Merger is not approved or lapses.
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INTRODUCTION
Pursuant to the Merger Agreement entered into between Beijing Feitian and
Beijing Yanhua on 29th December 2004, Beijing Yanhua Directors agreed to put
forward the Proposal to the Beijing Yanhua Shareholders.
Beijing Feitian was incorporated in the PRC for the purposes of the Merger and
is wholly owned by Sinopec Corp. Sinopec Corp. is a joint stock company
incorporated in the PRC with limited liability, and is owned as to
approximately 67.917% by China Petrochemical Corporation, which is a PRC
state-owned enterprise. Sinopec Corp. is the controlling shareholder of
Beijing Yanhua, being interested in approximately 70% of the issued share
capital of Beijing Yanhua (representing 100% of the Beijing Yanhua Domestic
Shares).
TERMS OF THE PROPOSAL
The Proposal is made pursuant to and in accordance with Article 184 of the PRC
Company Law.
Under the Merger Agreement, on the date of de-registration of Beijing Yanhua,
(i) Beijing Yanhua will be merged into Beijing Feitian, with Beijing Feitian
as the surviving corporation and will cease to exist as a separate legal
entity; and (ii) the assets and liabilities (together with the rights and
obligations attached to such assets) and the employees of Beijing Yanhua will
be assumed by Beijing Feitian. This "merger by absorption" is provided for
under the PRC Company Law and the Beijing Yanhua Articles.
Pursuant to the Proposal, Beijing Feitian will (i) pay the Cancellation Price
per Beijing Yanhua H Share in cash to the Beijing Yanhua H Shareholders for
the cancellation of all Beijing Yanhua H Shares and (ii) issue
RMB4,163,335,400 of new registered capital of Beijing Feitian to Sinopec
Corp., being the sole holder of all the Beijing Yanhua Domestic Shares. The
Cancellation Price represents a premium of approximately 10.9% over the
closing price of HK$3.425 per Beijing Yanhua H Share as quoted on the Hong
Kong Stock Exchange on 21st December 2004 (being the last date of trading
prior to the suspension of trading in the Beijing Yanhua H Shares pending the
issue of this announcement).
The Proposal requires approvals from the relevant PRC governmental and
regulatory bodies (including approvals of, inter alia, the CSRC (if
applicable), SASAC and SAFE).
According to the Beijing Yanhua Articles, any Beijing Yanhua Shareholder who
has opposed the Proposal may request Beijing Yanhua or other Beijing Yanhua
Shareholders who have approved the Proposal to acquire its Beijing Yanhua
Shares at a "fair price". The Merger Agreement provides that if any Beijing
Yanhua Shareholder elects to request Beijing Yanhua or other Beijing Yanhua
Shareholders who have voted for the Proposal to purchase its Beijing Yanhua
Shares at a "fair price", Beijing Feitian shall, at the request of Beijing
Yanhua or such Beijing Yanhua Shareholder, assume any liability which Beijing
Yanhua or such Beijing Yanhua Shareholder who has received such a request may
have towards the dissenting Beijing Yanhua Shareholder. The Merger Agreement
further provides that if more than 5% of the Beijing Yanhua H Shareholders
make such request, the Merger will lapse, unless Beijing Feitian decides to
waive this condition.
Beijing Yanhua is also required by the PRC Company Law and the Beijing Yanhua
Articles to notify its creditors of the Proposal. Beijing Yanhua's creditors
may require Beijing Yanhua to pay off its indebtedness or provide a
satisfactory guarantee for such indebtedness, failing which, according to the
PRC Company Law, the Proposal may not proceed. If the Independent Beijing
Yanhua Shareholders approve the Merger during the Special General Meeting of
the Independent Beijing Yanhua Shareholders, Beijing Yanhua and Beijing
Feitian will each publish an announcement on the day immediately after the
Special General Meeting of the Independent Beijing Yanhua Shareholders was
convened giving notice to their respective creditors of the Proposal. If any
creditor requests repayment of the indebtedness owed by Beijing Yanhua or
Beijing Feitian (as appropriate) or requests for any guarantee in relation to
such indebtedness, such request will have to be made within a 90-day period
from the date of such announcement. Upon the expiry of the relevant period
specified in the above announcement, such creditor's right to claim against
Beijing Yanhua or Beijing Feitian (as appropriate) shall lapse under PRC law.
CANCELLATION PRICE
The Cancellation Price per Beijing Yanhua H Share represents:
(i) a premium of approximately 10.9% over the closing price of HK$3.425 per
Beijing Yanhua H Share, as quoted on the Hong Kong Stock Exchange on
21st December 2004 (being the last traded price prior to the suspension
of trading in the Beijing Yanhua H Shares pending the issue of this
announcement);
(ii) a premium of approximately 15.9% over the average closing price of
approximately HK$3.280 per Beijing Yanhua H Share, based on the daily
closing prices as quoted on the Hong Kong Stock Exchange over the 5
trading days up to and including 21st December 2004;
(iii) a premium of approximately 22.7% over the average closing price of
approximately HK$3.097 per Beijing Yanhua H Share, based on the daily
closing prices as quoted on the Hong Kong Stock Exchange over the
1-month period up to and including 21st December 2004;
(iv) a premium of approximately 24.3% over the average closing price of
approximately HK$3.057 per Beijing Yanhua H Share, based on the daily
closing prices as quoted on the Hong Kong Stock Exchange over the
3-month period up to and including 21st December 2004;
(v) a premium of approximately 32.4% over the average closing price of
approximately HK$2.870 per Beijing Yanhua H Share, based on the daily
closing prices as quoted on the Hong Kong Stock Exchange over the
6-month period up to and including 21st December 2004; and
(vi) a premium of approximately 34.8% over the average closing price of
approximately HK$2.820 per Beijing Yanhua H Share, based on the daily
closing prices as quoted on the Hong Kong Stock Exchange over the
12-month period up to and including 21st December 2004.
The Cancellation Price per Beijing Yanhua H Share represents a premium of
approximately 140.5% to the NAV per Beijing Yanhua H Share of approximately
HK$1.58 as at 31st December 2003 and a premium of approximately 108.8% to the
unaudited net asset value per Beijing Yanhua H Share of approximately HK$1.82
as at 30th June 2004.
The Cancellation Price was arrived at after taking into consideration
prevailing and historical market prices of the Beijing Yanhua H Shares, the
NAV per Beijing Yanhua H Share as at 31st December 2003 and the unaudited net
asset value per Beijing Yanhua H Share as at 30th June 2004.
Funding For The Proposal
Sinopec Corp. and Beijing Feitian intend to finance the cash consideration
required for the Proposal from existing banking facilities of Sinopec Corp.
granted by Bank of China and made available to Sinopec Corp. and its
subsidiaries. Each of CICC and Morgan Stanley, being a financial adviser to
Sinopec Corp., is satisfied that sufficient financial resources are available
to Sinopec Corp. and Beijing Feitian for the satisfaction of Beijing Feitian's
obligations under the Proposal.
Under PRC law, an approval from SAFE as set out in Condition (iv) under the
section headed "Conditions of the Merger" below is required for exchanging RMB
to pay the Cancellation Price and other fees incurred in connection with the
Merger.
INFORMATION ON BEIJING YANHUA
Background
Beijing Yanhua was incorporated as a joint stock limited company in accordance
with the PRC Company Law on 23 April 1997 pursuant to the reorganization of
its predecessor. Beijing Yanhua's foreign shares (accounting for approximately
30% of the issued share capital of Beijing Yanhua) include Beijing Yanhua H
Shares listed on the Hong Kong Stock Exchange and Beijing Yanhua ADSs listed
on the New York Stock Exchange.
Principal business of Beijing Yanhua
The principal business of Beijing Yanhua involves the production and sale of
three principal petrochemical product groups, namely: (i) resins and plastics,
(ii) synthetic rubber, and (iii) basic organic chemical products. Beijing
Yanhua's principal production facilities, based on annual capacity, include a
710,000 tons ethylene production unit, a 380,000 tons low density polyethylene
production unit, a 360,000 tons polypropylene production unit, a 160,000 tons
high density polyethylene production unit, a 240,000 tons phenol-acetone unit,
a 80,000 tons cis-polybutadiene rubber production unit and a 30,000 tons butyl
rubber production unit.
Production and sale of resins and plastics
In 2003, resins and plastics sales of Beijing Yanhua were RMB 6,332,332,000,
representing approximately 55.2% of its total sales.
Production and sale of synthetic rubber
Beijing Yanhua's synthetic rubber products include cis-polybutadiene rubber,
bytyl rubber and SBS. In 2003, synthetic rubber sales were RMB1,923,773,000,
representing approximately 16.8 #% of its total sales.
Production and sale of basic organic chemical products.
Beijing Yanhua's main basic organic chemical products include ethylene glycol,
phenol and acetone. In 2003, basic organic chemical products sales were RMB
2,700,036,000, representing approximately 23.5% of its total sales.
Shareholding in Beijing Yanhua
As at the date of this announcement, Sinopec Corp. owned 2,362,000,000 Beijing
Yanhua Domestic Shares, representing approximately 70% of the issued share
capital of Beijing Yanhua, and Beijing Yanhua H Shareholders were interested
in 1,012,000,000 Beijing Yanhua H Shares, representing approximately 30% of
the issued share capital of Beijing Yanhua. As at the date of this
announcement, there were no outstanding options, warrants or convertible
securities issued by Beijing Yanhua.
Financial information
Summary financial information
A summary of the published audited results and NAV of Beijing Yanhua for each
of the three years ended 31st December 2003 and the unaudited results and net
asset value of Beijing Yanhua for the six months ended 30th June 2004 is set
out below:
(unaudited)
For the six
(audited) months
For the years ended 31st ended 30th
December June
2001 2002 2003 2004
RMB'000 RMB'000 RMB'000 RMB'000
Turnover 5,975,255 9,443,061 11,473,928 7,669,587
Operating (loss)/profit (350,644) 541,558 1,043,043 1,584,327
(Loss)/profit before taxation (410,223) 330,728 877,107 1,523,920
(Loss)/profit after tax but before minority interests (272,467) 209,099 633,885 1,031,656
(Loss)/profit attributable to Beijing Yanhua (272,467) 209,099 633,885 1,031,656
Shareholders
(Loss)/earnings per Beijing Yanhua Share (on a (RMB0.08) RMB0.06 RMB0.19 RMB0.31
fully-diluted basis)
(Loss)/earnings per Beijing Yanhua Share (on a (RMB0.08) RMB0.06 RMB0.19 RMB0.31
weighted average basis)
Net asset value per Beijing Yanhua Share RMB1.43 RMB1.49 RMB1.68 RMB1.93
INFORMATION ON SINOPEC CORP.
Background
Sinopec Corp. is a joint stock limited liability company incorporated on 25
February 2000 in accordance with the PRC Company Law whose H shares are listed
on the Hong Kong Stock Exchange, A shares are listed on the Shanghai Stock
Exchange and ADSs are listed on the New York Stock Exchange and the London
Stock Exchange. Sinopec Corp. is approximately 67.917% owned by China
Petrochemical Corporation, which is a PRC state-owned enterprise.
Principal business of Sinopec Corp.
The principal operations of Sinopec Corp. include exploring for and
developing, producing and trading crude oil and natural gas, processing crude
oil into refined oil products, producing refined oil products and trading,
transporting, distributing and marketing refined oil products and producing,
distributing and trading petrochemical products.
Exploring for and developing, producing and trading crude oil and natural gas
Sinopec Corp. is the second largest crude oil and gas producer in China. Most
of the crude oil and a small portion of the natural gas it produced are used
for its refining and chemical operations. Most of the natural gas and a small
portion of crude oil it produced are sold to refineries that are not owned by
Sinopec Corp. and third party customers.
Processing crude oil into refined oil products, producing refined oil products
and trading, transporting, distributing and marketing refined oil products
Sinopec Corp. is the largest oil refiner in China, producing gasoline, diesel,
jet fuel, lubricants, fuel oil, various petrochemical feedstock and other
refined oil products. Sinopec Corp. also has the largest distribution network
for refined oil products in China.
Producing, distributing and trading petrochemical products
Sinopec Corp. is the largest petrochemical producer and distributor in China.
The major products it produces and sells include intermediate petrochemicals,
synthetic resins, synthetic rubber, chemical fertilizers, and synthetic fiber
and its monomers and polymers.
INFORMATION ON BEIJING FEITIAN
Beijing Feitian is a wholly owned subsidiary of Sinopec Corp. established in
the PRC. It is 95% owned by Sinopec Corp. and 5% owned by Sinopec
International. Sinopec International is a wholly owned subsidiary of Sinopec
Corp. Beijing Feitian has been established for the purpose of the Merger and
has no substantive business.
REASONS FOR AND BENEFITS OF THE MERGER
Sinopec Corp. and Beijing Yanhua have identified a number of reasons for and
benefits of the Merger. These include:
1. The Merger can consolidate and strengthen the management of Sinopec
Corp. and Beijing Yanhua. Beijing Yanhua's petrochemical business will
be consolidated into Sinopec Corp.'s integrated oil and petrochemical
operation under a leaner and more efficient group structure, which will
be beneficial to Sinopec Corp. for achieving business strategies and
objectives for the group as a whole.
2. The Merger can reinforce the business value chain of Beijing Yanhua
through the vertical integration of Beijing Yanhua's petrochemical
assets with the upstream refining operation of Sinopec Corp.
3. The Merger can consolidate Sinopec Corp.'s resources and realize
potential synergies. The Merger will enable Sinopec Corp. to improve the
utilization of capital resources by centralising capital allocation and
enhancing capital expenditure management. After the Merger, Sinopec
Corp. can leverage its brand name, marketing capabilities and
distribution network to achieve economies of scale and reduce operations
costs.
4. The Merger can effectively eliminate intra-group competition. At
present, both Sinopec Corp. and Beijing Yanhua are engaged in the
petrochemical business with similar products and competing sales
channels. After the Merger, combined production and sales will
effectively eliminate this intra-group competition.
5. The Proposal offers all Beijing Yanhua H Shareholders a unique
opportunity to realise their investments in Beijing Yanhua at a cash
consideration which represents a premium over the market price of
Beijing Yanhua H Shares.
PRINCIPAL TERMS OF THE MERGER AGREEMENT
Conditions of the Merger
The Merger is conditional upon the fulfilment (unless waived, as applicable)
of all of the following events on or before 31st December 2005 (or such other
date as Beijing Yanhua and Beijing Feitian may agree):
(i) approval of the Merger Agreement by the requisite vote of the
shareholders of Beijing Yanhua and Beijing Feitian has been obtained;
(ii) authorisations have been obtained from all appropriate governments
and/or governmental bodies or regulatory bodies in Hong Kong and any
other relevant jurisdiction (except the PRC);
(iii) all necessary PRC Approvals or filings in respect of the Merger
Agreement and the Merger have been obtained or made;
(iv) approval from SAFE on exchanging the necessary foreign currencies to pay
the Cancellation Price and other fees or expenses incurred in connection
with the Merger has been obtained;
(v) Schedule 13E-3 has been filed with the SEC for a period of at least 30
days prior to the date on which the Special General Meeting and the
Special General Meeting of the Independent Beijing Yanhua Shareholders
will be held;
(vi) no statute, rule or regulation shall have been enacted or promulgated by
any governmental authority prohibiting the completion of the Merger; and
there shall be no order or injunction of a court of competent
jurisdiction in effect prohibiting completion of the Merger;
(vii) Beijing Yanhua has filed all necessary documents for its de-registration
with the Beijing SAIC;
(viii)Beijing Feitian has filed all necessary documents to increase its
registered capital in accordance with the Merger Agreement with the
Beijing SAIC;
(ix) the undertakings given by Beijing Yanhua and Beijing Feitian in the
Merger Agreement shall have been complied with in all material respects
and, to the extent that there is failure to comply, such non-compliance
shall not be of material significance to the Merger;
(x) not more than 5% of the Beijing Yanhua H Shareholders have demanded
Beijing Yanhua and/or other Beijing Yanhua Shareholders which have voted
for the Merger to purchase their Beijing Yanhua Shares in accordance
with the Beijing Yanhua Articles; and
(xi) the representations and warranties made by Beijing Yanhua and Beijing
Feitian in the Merger Agreement shall not contain mistakes or omissions
which will be of material significance to the Merger on the Delisting
Date.
De-registration of Beijing Yanhua
Within two weeks from the date when all the Conditions (save for those
mentioned in (vii) and (viii) above) have been fulfilled (unless waived, if
applicable), Beijing Yanhua and Beijing Feitian (as appropriate) will make all
necessary filings with the Beijing SAIC for de-registration of Beijing Yanhua
and for the increase in Beijing Feitian's registered capital in accordance
with the Merger Agreement. When these filings are made, the Merger will become
unconditional and the Beijing Yanhua Listing will be withdrawn. Payment will
be made to Beijing Yanhua H Shareholders no later than 10 days after
withdrawal of the Beijing Yanhua Listing. The register of Beijing Yanhua H
Shareholders will remain closed until Beijing Yanhua is de-registered.
Termination of the Merger Agreement
The Merger Agreement can be terminated at any time prior to the Delisting Date
by:
o either Beijing Feitian or Beijing Yanhua if:
(i) any governmental body has issued an order, decree or ruling or
taken any other action (which order, decree, ruling or other
action the parties hereto shall use their reasonable efforts to
lift), which permanently restrains, enjoins or otherwise prohibits
the Merger and such order, decree, ruling or other action shall
have become final and non-appealable;
(ii) the Conditions have not been satisfied or waived (if applicable)
by 31st December 2005; or
(iii) Beijing Yanhua has not obtained the requisite vote at the Special
General Meeting and the Special General Meeting of the Independent
Beijing Yanhua Shareholders for approving the Proposal;
o Beijing Yanhua if Beijing Feitian has breached in any material respect
any of its representations, warranties, covenants or other agreements
contained in the Merger Agreement, which breach cannot be or has not
been cured within 30 days after the giving of written notice by Beijing
Yanhua to Beijing Feitian, if applicable; or
o Beijing Feitian if Beijing Yanhua has breached any representation,
warranty, covenant or other agreement contained in the Merger Agreement
which breach cannot be or has not been cured within 30 days after the
giving of written notice by Beijing Feitian to Beijing Yanhua, if
applicable.
REGULATORY APPROVALS
The Merger requires approvals from the relevant PRC governmental and
regulatory bodies, including CSRC (if applicable), SASAC and SAFE. In
addition, Sinopec Corp., Beijing Feitian and Beijing Yanhua will seek such
consents, approvals, orders and other governmental authorizations necessary or
advisable to complete the Merger. Whilst Sinopec Corp., Beijing Feitian and
Beijing Yanhua believe that they will obtain the requisite regulatory
approvals, there can be no assurance that these will be obtained.
All Conditions will have to be fulfilled (or waived, as applicable), on or
before 31st December 2005 (or such other date as Beijing Yanhua and Beijing
Feitian may agree). Otherwise, the Merger will lapse.
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Warning:
Shareholders of Sinopec Corp. and Beijing Yanhua and potential investors
should be aware that the implementation of the Proposal is subject to the
Conditions as set out above being fulfilled or waived, as applicable. Thus,
the Proposal may or may not become effective. They are advised to exercise
caution when dealing in the shares of Sinopec Corp. and Beijing Yanhua,
respectively.
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WITHDRAWAL OF LISTING OF BEIJING YANHUA H SHARES AND BEIJING YANHUA ADSs
Upon fulfilment (or waiver, if applicable) of other Conditions, Beijing Yanhua
will apply for its de-registration and the Beijing Yanhua Listing will be
withdrawn. After the de-registration process of Beijing Yanhua is completed,
all Beijing Yanhua H Shares will no longer exist. Share certificates for the
Beijing Yanhua H Shares will thereafter cease to have effect as documents or
evidence of title and Beijing Yanhua will cease to exist as a legal entity.
The Beijing Yanhua ADSs will then be delisted on the New York Stock Exchange.
The Beijing Yanhua Shareholders will be notified by way of an announcement of
the exact date on which the relevant Conditions have been fulfilled (unless
waived, as applicable) and the date on which the Beijing Yanhua Listing is
withdrawn. The Merger will lapse if the Conditions are not fulfilled (unless
waived, as applicable) on or before 31st December 2005 (or such other date as
Beijing Yanhua and Beijing Feitian may agree) and the Beijing Yanhua
Shareholders will be notified by way of an announcement accordingly. A
detailed timetable for the Proposal will be included in the Composite Document
to be despatched to Beijing Yanhua Shareholders, which will also contain,
inter alia, further details of the Proposal and the Merger.
Any Beijing Yanhua Shareholder who has opposed the Proposal and has requested
Beijing Yanhua or other Beijing Yanhua Shareholders who have approved the
Proposal to acquire its Beijing Yanhua Shares at a "fair price" will, after
the de-registration of Beijing Yanhua, continue to have a right against
Beijing Yanhua and/or such Beijing Yanhua Shareholder, or Beijing Feitian (if
requested by Beijing Yanhua and/or such Beijing Yanhua Shareholder to assume
their respective liabilities after receiving the request from the dissenting
Beijing Yanhua Shareholder).
The Beijing Yanhua Listing will not be withdrawn and an application to delist
the Beijing Yanhua ADSs on the New York Stock Exchange will not be made if the
Merger is not approved or if the Proposal lapses or if any Condition is not
fulfilled (unless waived, as applicable).
OVERSEAS BEIJING YANHUA SHAREHOLDERS
The making of the Proposal to the Overseas Beijing Yanhua Shareholders may be
subject to the laws of the relevant jurisdictions. Overseas Beijing Yanhua
Shareholders should observe any applicable legal or regulatory requirements.
It is the responsibility of the Overseas Beijing Yanhua Shareholders wishing
to accept the Proposal to satisfy themselves as to the full observance of the
laws of the relevant jurisdiction in connection therewith, including the
obtaining of any governmental, exchange control or other consents which may be
required, or the compliance with other necessary formalities and the payment
of any issue, transfer or other taxes due in such jurisdiction. Beijing Yanhua
will be making necessary enquiries to determine whether or not it would be
unduly burdensome to send the Composite Document to any of the Overseas
Beijing Yanhua Shareholders. If appropriate, Sinopec Corp. or Beijing Feitian
will apply for a waiver from the Executive pursuant to Note 3 to Rule 8 of the
Takeovers Code, from the requirement to send the Composite Document to such
Overseas Beijing Yanhua Shareholders. The Executive may or may not grant such
a waiver.
MEETINGS
As required under the PRC Company Law, the Merger requires the approval of no
less than two-thirds of the Beijing Yanhua Shareholders attending the Special
General Meeting. According to the PRC Company Law and the Beijing Yanhua
Articles, Sinopec Corp. is eligible to vote in the Special General Meeting.
Sinopec Corp. intends to vote for the Proposal in the Special General Meeting.
Under Rule 2.10 of the Takeovers Code, which is deemed to be applicable to the
Proposal, the resolution of the Independent Beijing Yanhua Shareholders will
only be considered to have been passed if (i) the Proposal is approved by at
least 75% of the votes attaching to the Beijing Yanhua H Shares of the
Independent Beijing Yanhua Shareholders that are cast either in person or by
proxy at the Special General Meeting of the Independent Beijing Yanhua
Shareholders; and (ii) the number of votes cast against the resolution at the
Special General Meeting of the Independent Beijing Yanhua Shareholders is not
more than 10% of the votes attaching to all the Beijing Yanhua H Shares held
by all the Independent Beijing Yanhua Shareholders (i.e. not more than
101,200,000 Beijing Yanhua H Shares, based on 1,012,000,000 Beijing Yanhua H
Shares issued and held by the Independent Beijing Yanhua Shareholders as at
the Latest Practicable Date).
Sinopec Corp. will not vote in the Special General Meeting of the Independent
Beijing Yanhua Shareholders.
Notices of the above meetings will be sent to the Beijing Yanhua Shareholders
together with the Composite Document.
SUSPENSION AND RESUMPTION OF TRADING OF BEIJING YANHUA H SHARES AND BEIJING
YANHUA ADSS
At the request of Beijing Yanhua, trading in the Beijing Yanhua H Shares on
the Hong Kong Stock Exchange was suspended from 9:30 a.m. on 22nd December
2004 pending the issue of this announcement. Trading in the Beijing Yanhua
ADSs on the New York Stock Exchange was also suspended from approximately
10:00 a.m. on 21st December 2004 (United States Eastern Standard Time).
Application has been made by Beijing Yanhua to the Hong Kong Stock Exchange
for the resumption of trading in the Beijing Yanhua H Shares with effect from
9:30 a.m. on 30th December 2004 and application will be made to the New York
Stock Exchange for the resumption of trading in the Beijing Yanhua ADSs with
effect from 9:30 a.m. on 30th December 2004 (United States Eastern Standard
Time).
FINANCIAL ADVISERS, INDEPENDENT FINANCIAL ADVISER, INDEPENDENT BOARD COMMITTEE
AND GENERAL INFORMATION
Sinopec Corp. has appointed CICC and Morgan Stanley as its financial advisers
in connection with the Proposal. Beijing Yanhua has appointed Bear Stearns
Asia Limited as its financial adviser and the Independent Board Committee of
Beijing Yanhua has appointed Lehman Brothers Asia Limited as the independent
financial adviser to advise the Independent Board Committee in connection with
the Proposal. The independence of each member of the Independent Board
Committee will be confirmed with the Executive.
The Composite Document containing, inter alia, further details of the Proposal
and the Merger, the recommendation from the Independent Board Committee with
respect to the Proposal and the advice of the Independent Financial Adviser to
the Independent Board Committee, a notice of the Special General Meeting, a
notice of the Special General Meeting of Independent Beijing Yanhua
Shareholders to approve the Proposal, will be despatched to the Beijing Yanhua
Shareholders as soon as practicable in compliance with PRC law, the Listing
Rules and the Takeovers Code.
As far as the Sinopec Board is aware, there have been no dealings in the
Beijing Yanhua H Shares by Sinopec Corp. and parties who are acting in concert
with Sinopec Corp., during the 6 months prior to the date of this announcement
(subject to confirmation), save in relation to: (i) non-concert party dealings
of Morgan Stanley and persons controlling, controlled by or under the same
control as Morgan Stanley; and (ii) dealings for the account of
non-discretionary clients by the brokerage division of a subsidiary of CICC.
Save for the Proposal itself, there are no arrangements (whether by way of
option, indemnity or otherwise) of the kind referred to in Note 8 to Rule 22
of the Takeovers Code between Sinopec Corp. or any person acting in concert
with it and any other person in relation to shares of Sinopec Corp. or Beijing
Yanhua which might be material to the Proposal.
In this announcement, the following expressions have the meanings set out
below unless the context requires otherwise.
"Authorisations" all necessary authorisations, registrations,
filings rulings, consents, permissions and
approvals in connection with the Proposal
"Beijing Feitian" Beijing Feitian Petrochemical Co., Ltd, a limited
liability company established in the PRC and a
wholly owned subsidiary of Sinopec Corp.
"Beijing SAIC" the Administration of Industry and Commerce of
Beijing
"Beijing Yanhua" Sinopec Beijing Yanhua Petrochemical
Company Limited, a joint stock limited company
incorporated in the PRC with limited liability,
the H Shares of which are listed on the Hong Kong
Stock Exchange and whose American depositary
shares are listed on the New York Stock Exchange
"Beijing Yanhua ADS(s)" American depository share(s), each
representing ownership of 50 Beijing Yanhua H
Shares, which are listed on the New York Stock
Exchange
"Beijing Yanhua ADS holders of the Beijing Yanhua ADSs
Holders"
"Beijing Yanhua Articles" the articles of association of Beijing Yanhua
"Beijing Yanhua Board" the board of Beijing Yanhua Directors
"Beijing Yanhua director(s) of Beijing Yanhua
Director(s)"
"Beijing Yanhua domestic shares of RMB 1.00 each in the share
Domestic Share(s)" capital of Beijing Yanhua
"Beijing Yanhua H H share(s) of RMB1.00 each in the share capital
Yanhua which Share(s)" of Beijing are listed on the Hong Kong Stock
Exchange
"Beijing Yanhua H registered holder(s) of Beijing Yanhua H Shares
Shareholder(s)"
"Beijing Yanhua Listing" the listing of Beijing Yanhua H Shares on the Hong
Kong Stock Exchange
"Beijing Yanhua the Beijing Yanhua H Shareholders and Sinopec Corp.
Shareholders"
"Beijing Yanhua Shares" Beijing Yanhua Domestic Shares and Beijing
Yanhua H Shares
"Cancellation Price" the cancellation price of HK$3.80 per
Beijing Yanhua H Share payable in cash by Beijing
Feitian to the Beijing Yanhua H Shareholders
"CICC" China International Capital Corporation (Hong
Kong) Limited which is deemed licensed for Type 1
regulated activity (dealing in securities), Type 4
regulated activity (advising on securities), Type
6 regulated activity (advising on corporate
finance) and Type 9 regulated activity (asset
management) under the Securities and Futures
Ordinance of Hong Kong
"Conditions" the conditions to which the Proposal is subject
and "Condition" means any of them
"Composite Document" the document to be issued to the Beijing Yanhua
Shareholders in accordance with the Takeovers Code
and the Listing Rules
"CSRC" China Securities Regulatory Commission
"Delisting Date" the date on which all the Conditions are fulfilled
(unless waived, as applicable)
"Executive" the Executive Director of the Corporate Finance
Division of the Securities and Futures Commission
of Hong Kong or any delegate of the Executive
Director
"HK$" Hong Kong dollars, the lawful currency of Hong Kong
"Hong Kong" the Hong Kong Special Administrative Region of the
PRC
"Hong Kong Stock The Stock Exchange of Hong Kong Limited
Exchange"
"Independent Board an independent committee of the Beijing Yanhua
Committee" Board comprising the independent non-executive
Beijing Yanhua Directors, being Mr. Zhang Yanning,
Mr. Liu Haiyan and Mr. Yang Xuefeng
"Independent Financial Lehman Brothers Asia Limited, the independent
Adviser" financial adviser to the Independent Board
Committee retained pursuant to Rule 2.1 of the
Takeovers Code in connection with the Proposal
"Independent Beijing shareholders of Beijing Yanhua, other than Sinopec
Yanhua Shareholders" Corp. and parties acting in concert with Sinopec
Corp. (which are presumed to be acting in concert
with Beijing Feitian under the Takeovers Code)
"Latest Practicable Date" 28th December 2004, being the
latest practicable date prior to the issue of this
announcement
"Listing Rules" the Rules Governing the Listing of Securities on
The Stock Exchange of Hong Kong Limited (as
amended from time to time)
"London Stock Exchange" London Stock Exchange plc
"Meeting(s)" the Special General Meeting and the Special
General Meeting of the Independent Beijing Yanhua
Shareholders
"Merger" the proposed merger by absorption of Beijing
Yanhua by Beijing Feitian
"Merger Agreement" the agreement entered into between
Beijing Feitian and Beijing Yanhua on 29th
December 2004 in relation to the Merger
"Morgan Stanley" Morgan Stanley Dean Witter Asia Limited, a company
incorporated in Hong Kong, which is licensed for
Type 1 regulated activity (dealing in securities),
Type 4 regulated activity (advising on
securities), Type 6 regulated activity (advising
on corporate finance) and Type 7 regulated
activity (providing automated services) under the
Securities and Futures Ordinance of Hong Kong
"NAV" the audited net asset value of Beijing Yanhua as
set out in its published audited accounts
"New York Stock Exchange" New York Stock Exchange, Inc.
"Overseas Beijing Yanhua Beijing Yanhua Shareholders who are not residents
Shareholders" in Hong Kong
"PRC" the People's Republic of China, excluding for the
purposes of this announcement, Hong Kong, Macau
and Taiwan
"PRC Approvals" the approvals from the relevant PRC
governmental and regulatory bodies (including
approvals of, inter alia, CSRC (if applicable),
SASAC and SAFE)
"PRC Company Law" the Company Law of the PRC, as amended,
supplemented or otherwise modified from time to
time
"Proposal" the proposal for the privatisation of Beijing
Yanhua by Sinopec Corp. through Beijing Feitian by
way of merger by absorption of Beijing Yanhua by
Beijing Feitian pursuant to Article 184 of the PRC
Company Law
"RMB" Renminbi, the lawful currency of the PRC
"SASAC" State Assets Supervision and Administration
Commission of the State Council of the PRC
"SAFE" State Administration of Foreign Exchange
"SEC" Securities and Exchange Commission of the US
"Sinopec Board" the board of Sinopec Directors
"Sinopec Corp." China Petroleum & Chemical Corporation, a joint
stock limited company incorporated in the PRC with
limited liability, the H shares of which are
listed on the Hong Kong Stock Exchange
"Sinopec Director(s)" director(s) of Sinopec Corp.
"Sinopec International" China Petrochemical International Business Co.,
Ltd, a limited liability company established in
the PRC and a wholly owned subsidiary of Sinopec
Corp.
"Special General Meeting" the special general meeting of Beijing Yanhua
proposed to be convened and held in respect of the
approval of the Proposal
"Special General the special general meeting of the Independent
Meeting of the Beijing Yanhua Shareholders proposed to be convened
Independent and held in respect of the approval of the Proposal
Beijing Yanhua
Shareholders"
"Takeovers Code" The Code on Takeovers and Mergers
"US" the United States of America
"US$" United States dollars, the lawful currency of the
United States of America
On behalf of the board of On behalf of the board of
China Petroleum & Chemical Corporation Sinopec Beijing Yanhua Petrochemical
Chen Ge Company Limited
Secretary to the Board of Directors Zhou Quansheng
Secretary to the Board of Directors
Beijing, PRC, 29th December, 2004
The Sinopec Directors jointly and severally accept full responsibility for the
accuracy of the information contained in this announcement (other than that
relating to Beijing Yanhua and/or the Beijing Yanhua Board) and confirm,
having made all reasonable enquiries, that to the best of their knowledge,
opinions expressed in this announcement have been arrived at after due and
careful consideration and there are no other facts not contained in this
announcement, the omission of which would make any statement in this
announcement misleading.
As at the date hereof, the Sinopec Board comprises: Messrs. Chen Tonghai, Wang
Jiming, Mou Shuling, Zhang Jiaren, Cao Xianghong, Liu Genyuan, Gao Jian and
Fan Yifei, the independent non-executive directors are: Messrs. Chen Qingtai,
Ho Tsu Kwok Charles, Shi Wanpeng and Zhang Youcai; and the employee
representative director is Mr. Cao Yaofeng.
The Beijing Yanhua Directors jointly and severally accept full responsibility
for the accuracy of the information contained in this announcement (other than
that relating to Sinopec Corp. and/or the Sinopec Board) and confirm, having
made all reasonable enquiries, that to the best of their knowledge, opinions
expressed in this announcement have been arrived at after due and careful
consideration and there are no other facts not contained in this announcement,
the omission of which would make any statement in this announcement
misleading.
As at the date hereof, the Beijing Yanhua Board comprises: Mr. Wang Yongjian,
Mr. Yang Qingyu, Mr. Xu Hongxing as executive directors, Ms. Wang Yuying, Mr.
Wang Ruihua, Mr. Cui Guoqi and Mr. Xiang Hanyin as non-executive directors,
and Mr. Zhang Yanning, Mr. Liu Haiyan and Mr. Yang Xuefeng as independent
non-executive directors.
In this announcement, amounts denominated in RMB have been translated into HK$
at the exchange rate of RMB1.06 to HK$1.00 and amounts denominated in US$ have
been translated into HK$ at the rate of US$1.00 to HK$7.80. No representation
is made that the HK$ amounts could have been or could be converted into US$ or
RMB at such rates or at any other rate or at all.