Sinopec Embarks Major Move to Restructure Yizheng

Sinopec Corp , Asia's largest refiner, has taken a major step to restructure its loss-making unit Yizheng Chemical Fibre Co Ltd in an asset swap worth over a billion dollars.

Yizheng, which has been suffering from weak global polyester demand, said the restructuring would involve selling its assets valued at 6.5 billion yuan (1.06 billion US dollar) to its parent.

In return, Sinopec will inject an oilfield services unit into Yizheng, the unit said in a statement to the Shanghai stock exchange. The move will help create a flagship vehicle for Sinopec's oilfield services business and will allow Yizheng to exit the chemical fibre sector.

Yizheng, which was in the red in 2012 and 2013, saw its first-half net loss triple to 1.75 billion yuan from a year earlier due to weak demand for chemicals and chemical fibres, it said in August.

It faces the prospect of being delisted from the Shanghai exchange if it remains in the red for three years in a row.

Trading in its Hong Kong and Shanghai shares, which had been suspended since May 28, will resume on Monday.

For a copy of the statement in Chinese, please click: http://bit.ly/1rZotGo

(1 US dollar = 6.1344 Chinese yuan)

(Reporting by Lee Chyen Yee in SINGAPORE and Charlie Zhu in HONG KONG; Editing by Elaine Hardcastle)