China’s largest fertiliser maker Sinofert sells stake in key production asset to parent to fund major restructure
Shares hit after market leader reveals US$1.21b sale of 20.5pc stake in Shenzhen-listed potassium fertiliser maker Qinghai Salt Lake
The company, owned by state-run chemicals-to-financial services conglomerate Sinochem, has been studying various ways of modernising China’s agricultural industry – everything from diversifying planting methods to providing better financing for the industry.
Sinofert will now sell its 20.5 per cent stake in Shenzhen-listed potassium fertiliser maker Qinghai Salt Lake Industry, it said in a filing to Hong Kong’s stock exchange late on Tuesday, adding Sinochem’s offer is the only one on the table.
“Although Qinghai Salt Lake was an important potassium chloride asset for subsidiary Sinochem Fertilizer, under its global resource strategy, [the latter has] adjusted its plans,” the Sinofert statement said.
“The capital released can be used to implement a strategic transformation of the group’s business model.”
It plans to use 4 billion yuan of the proceeds to repay loans and use the rest to fund “future strategic development and normal business operations”.