Shanghai, China – A total of 13 ChemChina affiliates held by its fully owned subsidiary China Haohua Chemical Group are planning a backdoor listing on the Shanghai Stock Exchange.
The proposal is waiting for regulatory approval.
Shanghai-listed chemical research and consulting firm Sichuan Tianyi Science and Technology will absorb the affiliates, according to an announcement on 6 February.
Tianyi is based in Chengdu, Sichuan province with Haohua as its substantial shareholders.
The affiliates include chemical makers and research firms in polyurethane, rubber, electronic chemicals, specialty coatings and catalysts. China’s leading polyurethane research firm Liming Institute is part of the group.
The acquisitions are priced at CNY 6.3bn ($998m). Hoahua will receive payment in cash and new shares.
Tianyi is also raising an additional CNY 1.1bn through a private share placement.
The company said that this will fund a number of projects. These include including improving Liming Institute’s research facilities. When the deal is complete, 68% of Tianyi will be owned by Haohua.
‘China has promulgated a series of policies to encourage reforms of state owned enterprises as well as merger and acquisitions via the capital market…making central government owned companies more competitive globally,’ said the announcement.
‘[The transaction] is a significant step towards the overall listing of Haohua,’ the announcement added.