China Aviation Oil on track to relist
(Xinhua)
Updated: 2006-02-09 08:46

China Aviation Oil (Singapore) Corp.(CAO), the country's former jet-fuel supplier, had its yearly financial report of 2004 approved at the shareholders' meeting early this month, paving the way for its relist in early March.

According to Tuesday's China Securities Journal, CAO said in a bulletin that the company's relist plan is expected to be approvedby the shareholders at a meeting to be held in the first week of March.

CAO once lost more than 500 million U.S. dollars on risky oil trade in 2004, and its financial report of that year was delayed until the end of 2005, to allow a series of investigations by the Singapore government.

According to the financial report, CAO lost 864.9 million Singapore dollars in 2004, and the losses was narrowed to 7.30 million Singapore dollars by September 30, 2005.

David Gerald, head of Singapore's Securities Investors Association, said it will take a long time for CAO to make profit again.

Gu Yanfei, head of CAO's restructuring task force, revealed CAO plans to relist its shares in Singapore before the end of March, under the condition that it gets a mandate for the restructuring plan from the shareholders at the early-March meeting. But Gu did not give the specific date of the meeting.

Sources from some Singapore's media said the Singapore Stock Exchange market has "agreed in principle" CAO's relist plan.

Gu said CAO will set up a new board of directors with two representatives from British oil giant BP Plc., but Singapore's state-owned Temasek Holdings Pte. Ltd will have no seat on the new board. Gu believed the move will help to "repair CAO's image".

CAO, which enjoyed a monopoly on importing jet fuel to China, shocked financial markets in November 2004 after it disclosed losses of about 550 million U.S. dollars from trading oil derivatives and applied to Singapore's High Court for protection from creditors.

As compensation for the creditors, CAO's parent company, the state-owned China Aviation Oil Holding Company, injected 75.77 million U.S. dollars into CAO, about 34.4 percent of CAO's total capital stock after the restructuring.

In addition, BP will invest 44 million U.S. dollars in CAO for 20 percent of its shares, and Temasek will purchase a 4.65 percent share for 10.23 U.S. million dollars.

Sources from CAO said the company will not pay legal fees for Chen Jiulin, the CEO of CAO. Chen is facing several charges relating to CAO's bankruptcy, and will face the court in March this year.