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Sinochem Corp to raise US$5.5 billion via IPO

China’s Sinochem Corp plans to raise up to 35 billion yuan (US$5.5 billion) via an initial public offering in Shanghai, in what would easily be the biggest IPO in the mainland market in the past year.

The firm, which has businesses ranging from oil exploration to chemicals to property, will use the proceeds to fund a refinery project in Quanzhou, Fujian  Province it said in a filing posted on the Environment Ministry’s website on Thursday.

In July, Sinochem obtained approval from the environmental watchdog for the 240,000 barrel-per-day plant in the southeastern province of China.

Sinochem plans to sell up to 26.5 billion new shares, or 40 percent of its enlarged capital, to raise 20-35 billion yuan through the IPO, it said.

Companies with operations that impact the environment, such as miners and oil refinery operators, first need to obtain clearance from the Environment Ministry before seeking approval from the securities regulator for IPOs.

IPOs on China market have been dominated by smaller deals so far this year, with the biggest deal being Sinohydro’s US$2.1 billion fundraising last month. Companies raised about US$34.9 billion in total from first-time share sales in the first nine months of the year on the Shanghai and Shenzhen exchanges, down 37 percent from a year earlier.

Sinochem Corp was established in 2009 as the result of a group restructuring of Sinochem Group, which owns four listed units including Sinochem International Corp, Sinofert Holdings, Franshion Properties (China), Far East Horizon.

Sinochem Group currently has a 98 percent stake in Sinochem Corp.

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