CEFC China May Cut Half Its Workers But Rosneft Deal Still Alive
CEFC May Cut Half Its Workers; Rosneft Deal Alive, Official Says
(Bloomberg) -- CEFC China Energy Co. may cut half of its 30,000-strong workforce as the sprawling conglomerate faces increased financial pressures and scrutiny from Beijing, said an official at one of its units.
A deal to buy 14 percent of Rosneft PJSC, however, remains viable despite being impacted by the company’s recent troubles, Zhuang Jianzhong, vice director of CEFC’s international research unit, said Wednesday on the sidelines of an energy conference in Shanghai.
CEFC’s rapid rise peaked last year when it agreed to purchase a $9 billion stake in Rosneft, the culmination of Chairman Ye Jianming’s efforts to align his business with the overseas political and economic goals of President Xi Jinping. But things began to unravel this year as Ye, who has stepped down from management, came under investigation by Chinese authorities and financial troubles emerged.
“We are trying to streamline our business and staff, and hope we can make it through this difficult time,” Zhuang said. While declining to give a specific number for the cuts, he said it would be more than 10,000.
A Shanghai-based CEFC spokesperson declined to comment.
It’s considering selling its real estate holdings and a brokerage, and China’s Citic Group is taking a 49 percent stake in its European operations. Reuters reported this week that the Chinese state investment giant is also looking at CEFC’s oil assets in Abu Dhabi.
In September, when the Rosneft agreement was announced, CEFC said its workforce had reached nearly 50,000 employees and described itself as China’s largest private oil and gas company, with revenue of more than $40 billion.
To contact Bloomberg News staff for this story: Jing Yang in Shanghai at jyang251@bloomberg.net, Aibing Guo in Hong Kong at aguo10@bloomberg.net.
To contact the editors responsible for this story: Ramsey Al-Rikabi at ralrikabi@bloomberg.net, Aaron Clark, Emma O'Brien
©2018 Bloomberg L.P.
With assistance from Jing Yang, Aibing Guo