Loading in 2 Seconds...
Loading in 2 Seconds...
Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.
Privatization of Beijing Yanhua bySinopec Corp. through Beijing Feitian China Petroleum & Chemical Corporation 30 December 2004
Disclaimer This presentation and the presentation materials distributed herewith include forward-looking statements. All statements, other than statements of historical facts, that address activities, events or developments that Sinopec Corp. expects or anticipates will or may occur in the future (including but not limited to projections, targets, estimates and business plans) are forward-looking statements. Sinopec Corp.'s actual results or developments may differ materially from those indicated by these forward-looking statements as a result of various factors and uncertainties, including but not limited to price fluctuations, actual demand, exchange rate fluctuations, exploration and development outcomes, estimates of proven reserves, market shares, competition, environmental risks, changes in legal, financial and regulatory frameworks, international economic and financial market conditions, political risks, project delay, project approval, cost estimates and other risks and factors beyond our control. In addition, Sinopec Corp. makes the forward-looking statements referred to herein as of today and undertakes no obligation to update these statements. Financial figures in this presentation are based on International Financial Reporting Standards.
Proposed Transaction Conditions Precedent Transaction Overview Privatization of Beijing Yanhua by Sinopec Corp. through its wholly owned subsidiary Beijing Feitian Cancellation Price and Form of Payment HKD3.80 per H share of Beijing Yanhua. Total consideration for the H shares approximates RMB4.076bn and will be paid in cash Include but not limited to: • Approvals by shareholders and independent shareholders of Beijing Yanhua (tentatively scheduled on 1 March 2005)and approval by shareholders of Beijing Feitian • Approvals by relevant regulatory authorities The date of completing deregistration of Beijing Yanhua, after fulfillment of all precedent conditions Effective Date China International Capital Corporation (Hong Kong) Limited Morgan Stanley Dean Witter Asia Limited Financial Advisers to Sinopec Corp. Financial Adviser toBeijing Yanhua Bear Stearns Asia Limited Independent Financial Adviser to Beijing Yanhua Lehman Brothers Asia Investment Limited
BusinessOverview of Beijing Yanhua • Beijing Yanhua’s majorproducts： • Synthetic resins and plastics • Synthetic rubber • Basic organic chemical products Turnover by Products (2003) (Total Turnover RMB11.47Bn) RMB, bn • Beijing Yanyua’s major manufacturing facilities： • 710,000 ton/year ethylene cracker facility • 380,000 ton/year LDPE facility • 360,000 ton/year polypropylene facility • 160,000 ton/year HDPE facility • 240,000 ton/year phenol-acetone facility • 80,000 ton/year cis-polybutadiensrubber facility • 30,000 ton/year butyl rubber facility, etc. Source: Beijing Yanhua
Financial Summary of Beijing Yanhua 2002 2003 1H2003 1H2004 Change(%) RMB Billion 11.47 Turnover 7.67 39.7 9.44 5.49 1.91 EBITDA 2.03 144.6 1.33 0.83 1.01 EBIT 1.57 313.2 0.53 0.38 0.63 Net Profit 1.03 442.1 0.21 0.19 0.19 0.31 416.7 0.06 EPS (RMB/Share) 0.06 9.55 Total Assets 9.20 - 4.1 10.26 9.58 3.89 Total Liabilities 2.68 - 38.7 5.24 4.37 5.66 Net Asset 6.52 25.1 5.02 5.21 1.61 Cash flow from operations 1.53 84.3 1.04 0.83 33.0% Debt/Capital 20.8% -1680bps 45.4% 37.6% 13.4 EBITDA/Interest Expense 41.0 +31.4x 6.8 9.6 Note：In accordance with International Financial ReportingStandards; 2003 interim results and 2004 interim results are unaudited
Strategic Rationale for Sinopec Corp. • Rationalize managerial system, reinforce and centralize internal management • Streamline Beijing Yanhua’s business value chain • Integrate resources and realize consolidation synergies • Effectively eliminate intra-group competition
Transaction Procedures • Sinopec Corp., Beijing Feitian and Beijing Yanhua held separate board meetings or independent board meetings • Joint announcement by Sinopec Corp. and Beijing Yanhua • Shareholders’ meeting of Feitian and Shareholders’ and independent shareholders’ meetings of Beijing Yanhua to approve the merger • After applications to relevant authorities are approved, Beijing Yanhua will apply for delisting and deregistration, and notify creditors of Beijing Yanhua • Beijing Feitian will pay the cancellation price to Beijing Yanhua H shareholders and issue new registered capital to Sinopec Corp; Beijing Yanhuan will be deregistered after which the transaction will be completed • Beijing Feitian deregisters when appropriate, Beijing Yanhua’s operation will be merged into Sinopec Corp. Sinopec Corp. 70.01％ Issue New Registered Capital HShareholders 100％ Cash CancellationPrice 29.99％ Beijing Feitian (Wholly-owned subsidiary) Beijing Yanhua Merged into Merger Cash / new registered capitalflow
Pricing Principles and Methodologies Based on fair and reasonable principles for a win-win transaction • To ensure shareholders interests of Sinopec Corp. and achieve EPS accretion • To offer reasonable return to Beijing Yanhua’s H shareholders Principles Applied various commonly adopted valuation methods in the equity markets Methodologies Based on opinions from financial advisors and independent advisor, pricing principles, methodologies and cancellation price were substantially discussed and negotiated at arm’s length between both parties before final agreement was reached Procedures
Cancellation Price Cancellation Price to Beijing Yanhua H Shares at HKD3.80 per Share • Reasonable to both parties according to comparable company analysis Source：I/B/E/S Estimates (as of 21 December 2004) • Premium offered is reasonable compared the proposed cancellation price and historical trading prices of Beijing Yanhua H shares Note: All periods stated above refer to the period including and up to 21 December 2004
Potential Impact on Sinopec Corp. The following is based on consolidated financial results for the six months ended 30 June 2004: • Impact on consolidated liabilities and shareholders’ fund • Liabilities increases by RMB 4.076bn • Minority interests decreases by RMB 1.955bn • Sinopec Corp.’s debt/capital ratio slightly increases • Existing shareholders’ fund remains unchanged • Impact on revenue and expense • Consolidated sales revenue remains unchanged • Interest expense slightly increases • Administration expense moderately decreases • Moderate proforma accretion on earnings per share In the long run, this transaction should have positive impact on Sinopec Corp.’s overall profitability
Conclusion • This transaction would contribute to the continual development of Sinopec Corp. It is also another demonstrationofthe efforts of Sinopec Corp.’s managementto deliver their IPO promises • A fair and reasonable transaction to both parties at a cancellation price of HKD3.80 for each Beijing Yanhua H Share: • In the long run, this transaction should enhance Sinopec Corp.’s ability to generate profit and hence increase its shareholders’ value • A reasonable cash offer price at a premium to Beijing Yanhua’s H shareholders • Upon completion of the Merger, Sinopec Corp. will aim to realize synergies in investment, management and resource allocation, as well as enhance overall operating efficiency Transaction Aligns with Sinopec Corp.’s Shareholders’ Interest
For Further Information http://www.sinopec.com Investor Relations Beijing: Tel: (8610) 64990060 Fax: (8610) 64990489 Email: email@example.com Hong Kong: Tel: (852) 28242638Fax: (852) 28243669 Email: firstname.lastname@example.org New York: Tel: (212) 759 5085 Fax: (212) 759 6882 Email: email@example.com Media Relations Tel: (8610) 64990092 Fax: (8610) 64990093 Email: firstname.lastname@example.org