OREANDA-NEWS. September 29, 2014. China's largest oil refiner intends to sell a nearly 30% stake in its sales-and-marketing unit to 25 investors, as Beijing continues to inject private capital into state-owned enterprises to boost returns and efficiency.

China Petroleum & Chemical Corp. , known as Sinopec, said that the investors would acquire the stake for 107.1 billion yuan (USD17.5 billion). Sinopec would retain 70.1% of the retail unit, which operates more than 30,000 gasoline stations and 23,000 convenience stores in some of the richest areas of China.

The unit, Sinopec Sales, also has 80 million gas-card holders. Parent company Sinopec said the sale represents a premium of 20% to the unit's book value and that the deal is subject to regulatory approval. No investor would own more than a 2.8% stake in the unit. The investors come from a diverse selection of industries: life insurance, technology, appliance making and juice production, among others.

They include a number of companies that already have been announced as Sinopec's "strategic partners." One investor is a fund that counts Chinese Internet company Tencent Holdings Ltd. among its shareholders. More than half of Sinopec's 25 newest investors are incorporated in China, with the balance incorporated offshore but ultimately related to Chinese entities. Sinopec Chairman Fu Chengyu said earlier this year that the stake would be made available to both foreign and domestic investors.

The announcement caps a process that began in February, when Sinopec said it was following directives laid out in November as part of China's landmark overhaul plan, which called for private companies to play a larger role in a mixed-ownership economy. Sinopec has the largest petroleum sales-and-distribution network in China, based on the number of its fuel stations, which the company pegged at 30,532 at the end of last year.

The associated convenience-store network is the biggest in the country, with a footprint 12 times as large as 7-Eleven's, according to brokerage firm Bernstein Research. Although Sinopec's primary operations are in oil refining and sales, those segments aren't as attractive as other parts of the oil and natural-gas industry. Sinopec could use proceeds from the divestiture to invest in businesses with higher returns such as exploration and production, some analysts have said. Additional funds would come at a crucial time for Sinopec, which is expected to trim spending this year because of a global slowdown in oil demand.

Sinopec has said it is hoping the new investment will help revitalize its gas-station business, where convenience stores bring in far less income than is common in the West. Some of the investors offer interesting business opportunities. Appliance maker Haier Electronics Group, for instance, would own a 0.341% stake through a subsidiary. Sinopec said Friday that its sales-and-marketing unit would cooperate with Haier in interactive marketing and logistics. In return, Sinopec would provide Haier with fuel for transportation and delivery operations.