BEIJING, September 5 (InfoChina) – Sinopec’s proposed scheme for its split equity structure reform, which says holders of currently non-negotiable shares will offer 2.8-for-10 bonus shares to holders of tradable A-shares in compensation for the right of negotiation of their shares, is likely to get a pass as the proposal has got support from institutional investors holding over 55% of the currently tradable A-shares although other public A-share holders demand to raise the compensation to 3-for-10 bonus shares, Beijing Times reports.

That is to say, the reform scheme proposed on August 21 is unlikely to be changed.

       The A-share holders who object the scheme say that the company should raise the compensation because Sinopec’s IPO (made in 2001) price in Shanghai was 4.22 yuan, much higher than its Hong Kong IPO (made in 2000) price at 1.61 Hong Kong dollars. The premiums, of course, were paid by the public A-share holders.

       Sinopec said the proposed compensation was set on the basis of the average compensation of other bluechips’ reform schemes, which averaged 2.7-for-10 bonus shares, and moreover, its price/earning ratio is only around 10 multiples after the compensation is executed, much lower than bluechips’ average.