Sinopec Shanghai Petrochemical Company Limited (stock code: 00338), also referred to as SPC, has announced that its board of directors approved the entry into new framework agreements (the “New Framework Agreements”) with China Petrochemical Corporation (“Sinopec Group”) and China Petroleum & Chemical Corporation (“Sinopec Corp.”) related to ongoing connected transactions. These arrangements aim to maintain the company’s normal operations beyond 31 December 2025, when the existing framework agreements expire.
SPC’s continuing connected transactions under the New Framework Agreements will have a three-year term expiring on 31 December 2028. They encompass purchases of raw materials, sales of petroleum and petrochemical products, agency sales services, construction and engineering design, insurance, property leasing, comprehensive services, and financial services. Annual caps for each category of transactions have been proposed, reflecting factors such as historical transaction data, production and business forecasts, and price fluctuations in oil and petrochemical markets.
The New Mutual Product Supply and Sale Services Framework Agreement and the New Comprehensive Services Framework Agreement involve major continuing connected transactions. Due to certain size thresholds, they require reporting, disclosure, and approval of independent shareholders under Hong Kong and Shanghai listing rules. SPC will therefore convene an extraordinary general meeting (EGM) to seek approval for these major transactions and the related annual caps. Sinopec Corp. and its associates, holding approximately 51.81% of SPC’s share capital, will abstain from voting at the EGM.
Under the New Financial Services Framework Agreement, financial transactions are generally subject to reporting and announcement obligations but exempt from independent shareholders’ approval, provided they follow standard commercial terms and relevant regulatory guidelines. In accordance with internal reviews and inspections, the company states that these arrangements are at market prices, fair, and beneficial for operational efficiency. SPC will issue further details, including a circular and notice of EGM, in late November 2025 to provide shareholders with relevant information and an independent financial adviser’s opinion on the major continuing connected transactions.
SPC, based in Shanghai’s Jinshanwei, processes crude oil and produces a wide range of petroleum products, petrochemical feedstocks, synthetic fibers, and resins. Sinopec Corp. focuses on global oil and gas exploration, refining, and petrochemical production, while Sinopec Group is its controlling shareholder. According to the announcement, SPC believes the new agreements will ensure stable supply of materials, enhance operational efficiency, and maintain reliable financial services for the company’s ongoing and planned projects.