China National Petroleum Corp. plans to buy Zhuhai bank

10 April 2007

Beijing, China, 10 April – China’s main oil group, China’s National Petroleum Corp. (CNPC), is in talks to buy an 80 to 90 percent stake in the Zhuhai City Commercial Bank, sources close to the process said over the weekend.

High level CNPC officials had talks with the government of Zhuhai, a special economic region of China next to Macau, about the possibility of restructuring the bank which is “drowned” in debt.

The city’s government has been trying to convince the CNPC board to build a storage area in Zhuhai, in order to store part of China’s strategic oil reserves.

The sources added that the financial department of CNPC is now expected to hire an independent auditor to analyze the bank’s accounts, which is a fundamental step for the group’s board to decide whether to go ahead with the acquisition.

The Zhuhai Bank, which has total assets of less than the equivalent of US$1.3 billion, has a bad debt ration of over 50 percent, against a national average of 8 percent.

A bank executive, which is controlled by the city’s government, said that the institution was in talks with potential national and foreign investors in order to improve its financial situation. (macauhub)