Petrochemical specialist Yip’s Chemical Holdings Limited (Yip’s Chemical) has announced that it will sell a majority stake in its subsidiary Handsome Chemical (Handsome) to investment firm PAG.
Revealed today (26th July), the HK$2,688m (US$340m) deal will see Yip’s Chemical selling a 51% effective interest in its subsidiary, which is the world’s largest acetate solvents manufacturer.
In a drive to develop the upstream raw material market for solvents, Handsome will harness the new partnership to increase the capacity of acetic acid production by constructing an acetic acid plant with an annual production capacity of 600,000 tonnes.
Located in Jingmen Chemical Recycling Industrial Park (Jingmen Park), Hubei Province, China, the US$257m plant will ensure supply of raw materials for Handsome.
A partnership with Yindge Gases, part of PAG-controlled AirPower Technologies Group will allow Handsome to source carbon monoxide – one of the key feedstocks for acetic acid.
By reducing the distance for CO transportation, the partnership could reduce carbon emissions by over 300,000 tonnes per year for Yindge Gases.
Commenting on the deal, Ip Chi Shing, Chairman, Yip’s Chemical, praised the supply chain of the Chinese industrial sector throughout the pandemic, stating that it has shown ‘incredible resilience’.
“We believe that joining forces with PAG to advance the solvents business will create more value for its business partners and shareholders,” he added.
Following the deal with Handsome, Yip’s Chemical will hold a 24% effective interest in the company and aims to use its net proceeds – worth US$312 – to advance its long-term goals including a focus on sustainability and service.