Sinopec Corp. announced on 27 April that Gaoqiao Petrochemical (a subsidiary of the Company), BP Chemicals and the Company entered into the Acquisition Agreement, pursuant to which Gaoqiao Petrochemical agreed to purchase a 50 percent stake in the Shanghai SECCO Petrochemical Company Limited (SECCO) from BP Chemicals. Upon completion of the Acquisition, SECCO will be held as to 50% by Gaoqiao Petrochemical, 30% by Sinopec and 20% by Shanghai Petrochemical. The total consideration of the Acquisition was $1.68 billion which, less any dividends that may be paid by SECCO to BP Chemicals from the date of the Acquisition Agreement to the Date of Legal Title Transfer (inclusive), shall be payable in accordance with the terms and conditions of the Acquisition Agreement.
SECCO was established in October 2001, which is currently owned by Sinopec (30%), Sinopec Shanghai Petrochemical Company Limited (20%) and BP (50%). It is located in the Shanghai Chemical Industry Park and has 13 chemical facilities leading by ethylene cracking unit with production capacity of 1.09 million ton per year.
Currently, SECCO, with a good track record of performance in business, is a mutual supplier of feedstocks with Gaoqiao Petrochemical and Gaoqiao Petrochemical is the main naphtha supplier for SECCO. Upon Completion of the Acquisition, SECCO will become a controlled subsidiary of Sinopec, which helps build synergy through integration with Gaoqiao Petrochemical's refinery projects and is expected to maintain good profitability, thus further improve the company's financial performance. In addition, the completion of the acquisition will help facilitate the building of the refining-chemical base in Shanghai among the Sinopec's big four refining-chemical bases.