S&P revises Sinochem Group, ChemChina views

S&P said it revised its outlook on Sinochem Hong Kong (Group) Co. Ltd., Sinochem International Corp. (SIC) and China National Bluestar (Group) Co. Ltd. to developing from stable.

The revision follows the Chinese government’s approval to restructure China National Chemical Corp. Ltd. (ChemChina). S&P changed ChemChina’s outlook to positive.

China plans to combine the companies under a new holding company or NewCo, which will be the only state-owned enterprise in the chemical industry owned by the central Chinese government.

“Its combined revenue and EBITDA would have reached Chinese renminbi (RMB) 1 trillion and RMB 75.5 billion in 2019, respectively. NewCo will also have a wide array of business lines across energy, agriculture, chemicals, tires, machinery, real estate, and financial services. Such business diversification is credit positive, in our view,” S&P said in a press release.

Concurrently, the agency affirmed the BBB rating on ChemChina and Bluestar, A- rating on Sinochem Hong Kong and the BBB+ rating on SIC. S&P also affirmed the long-term issue ratings of the senior unsecured notes guaranteed by ChemChina, Bluestar, Sinochem Hong Kong, and SIC.

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