The oil giant Saudi Aramco invested 24.6 billion in Rongsheng Petrochemical, once again expanding China's investment territory.
On the evening of March 27, Rongsheng Petrochemical announced that Rongsheng Holdings intends to transfer 10% of the company it holds plus one share to AOC, a subsidiary of Saudi Aramco, at a price of 24.3 yuan per share. 24.6 billion yuan.
The closing price of Rongsheng Petrochemical was 12.91 yuan on March 27, and the transaction premium was about 88%. After the transaction is completed, AOC will hold 10% plus one share of Rongsheng Petrochemical.
In addition, Rongsheng Petrochemical also signed a package agreement with strategic partner Saudi Aramco and its related parties on crude oil procurement under the strategic cooperation agreement. etc. to cooperate.
Rongsheng Petrochemical stated that the change in equity is aimed at promoting the company's strategic cooperation with Saudi Aramco and its related parties in the petrochemical field.
Rongsheng Petrochemical stated that through the signing of the above agreement, the company and its subsidiaries will further consolidate the cooperation relationship with Saudi Aramco's existing crude oil procurement business, obtain a long-term and stable supply of crude oil of 480,000 barrels per day , and the supply of other chemical raw materials, and It is expected to further expand the overseas sales channels of chemical products and ensure the stability of the petrochemical industry chain.
According to the announcement, Rongsheng Petrochemical and Saudi Aramco signed a package agreement such as the "Crude Oil Purchase Agreement" for an initial fixed period of 20 years, which will be extended for a period of five years.
In addition to the raw material purchase agreement, the two parties also signed a crude oil storage framework agreement and a technology sharing framework agreement. Saudi Aramco provides appropriate information related to technology (including but not limited to technology in the oil refining and petrochemical industries), and the two parties use their advantages to complement each other in technology. Jointly develop new technologies, processes and equipment to meet future market demands.
The two parties also signed the "Supplementary Agreement" at the same time, agreeing:
During the period when AOC holds no less than 98,400 shares of Rongsheng Petrochemical, Rongsheng Holdings agrees to exercise the voting rights of all shares it currently owns, acquires later or Rongsheng Holdings has the right to exercise voting rights, so as to urge AOC to nominate Individuals should be elected to join the board of directors of the company;
Within 3 years from the date of delivery of the shares transferred by AOC, Rongsheng Petrochemical promises that the company should hold no less than 51% of Zhejiang Petrochemical's equity; anyone outside Rongsheng Petrochemical has no right to directly Either indirectly instruct or cause to instruct Zhejiang Petrochemical's management and policies that Rongsheng Petrochemical shall not sell all or substantially all of the assets or business of Zhejiang Petrochemical
; Zhepec's financing arrangements, or any material revisions or other changes to its assets and business, shall be notified in writing to AOC and/or its designated affiliates.
Rongsheng Petrochemical operates the world's largest monomer refinery Zhejiang Petrochemical's 40 million tons refining and chemical integration project. It is an important producer of polyester, new energy materials, engineering plastics and high value-added polyolefins in China and Asia. It is the world's largest The production capacity of polyethylene, polypropylene, PET, EVA, ABS and other products ranks among the top in the world.
Rongsheng Petrochemical stated that in 2022, based on the existing crude oil purchase agreement, the company purchased about 60.3 billion yuan of crude oil and other raw materials from Saudi Aramco and its related parties, accounting for 21% of the company's similar transactions . From January to February 2023, the company purchased about 9 billion yuan of crude oil and other raw materials from Saudi Aramco and its related parties.
Saudi Aramco is one of the largest integrated energy and chemical companies in the world, and it is also the second largest listed company in the world by market value. Its main shareholder is the government of the Kingdom of Saudi Arabia. In 2022, Saudi Aramco's net profit will reach a record US$161.1 billion, and its free cash flow will be US$148.5 billion, which is also a record.
Since the beginning of this year, Saudi Aramco has accelerated its investment in China. On March 2 this year, Wall Street News learned that Saudi Aramco signed a letter of intent with Geely and Renault Group, and will become a minority shareholder in the new powertrain company jointly owned by Geely and Renault.
On March 26, the Shanghai Securities News learned that Saudi Aramco, together with North Industries Group and Panjin Xincheng Industry Group, plans to build a large-scale integrated refining and chemical plant in Northeast China. The joint venture company is called Huajin Aramco Petrochemical Co., Ltd. 30%, 51% and 19% respectively. The joint venture includes an oil refinery with a daily processing capacity of 300,000 barrels and a chemical plant with an annual
output of 1.65 million tons of ethylene and 2 million tons of paraxylene. Subject to obtaining the required administrative approvals, the project will begin construction in the second quarter of 2023 and is expected to be fully operational in 2026. The joint venture company is located in Panjin City, Liaoning Province, and Saudi Aramco will supply it with up to 210,000 barrels per day of crude oil