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Petro皇冠体育app denies share offer rumors

By Ding Qi (chinadaily.com.cn)
Updated: 2008-08-26 18:01

Petro皇冠体育app, the nation's leading oil producer, has denied rumors that it was seeking $11.8 billion worth of share offers to finance an acquisition deal, the 皇冠体育app Securities Journal reported on Tuesday.

The denial may help to ease investors' worries about massive fund raising in the weak capital market, dealers said.

A Dow Jones newswires report said yesterday that Petro皇冠体育app was planning to buy 50 percent stake of 皇冠体育app National Oil & Gas Exploration and Development Co (CNODC) from parent company 皇冠体育app National Petroleum Corporation (CNPC). The deal is estimated worth $11.8 billion.

Petro皇冠体育app favors issuing additional A shares on the Shanghai Stock Exchange to finance the mega deal, according to the report.

An unnamed spokesman from Petro皇冠体育app told today's 皇冠体育app Securities Journal that the share offer rumor is completely groundless.

"I have never heard about such news and don't know where it came from," said a spokesman. He also reminded investors to guard against similar rumors in the market.

Petro皇冠体育app currently holds a 50 percent stake in CNODC. In March this year, Jiang Jieming, board chairman of Petro皇冠体育app, said the company had begun preparatory work to acquire the rest of the 50 percent stake in CNODC. However, he stressed that since Petro皇冠体育app has ample cash flow, it didn't need to raise additional funds for the acquisition.

As of last year-end, CNODC had been operating 71 oil and gas investment projects in 26 countries. It had an annual output of 62 million tons of oil and six billion cubic meters of natural gas. The share acquisition, if completed, will add more overseas oil and gas resources to Petro皇冠体育app.

However, according to securities insiders, given the current weak performance of the stock market, a large scale share offer may cause further stock fluctuations and is not a good choice for Petro皇冠体育app.

An unnamed market watcher told the paper that the share offer rumor may come from those who intend to suppress Petro皇冠体育app's share price in order to buy cheaper.

Shares of Petro皇冠体育app closed 1.76 percent lower today at 13.37 yuan, more than two thirds lower than its historic debut last November. The company is scheduled to disclose half-year results on Thursday.