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Source: State body buys Total stake

(China Daily/Agencies)
Updated: 2008-04-05 09:53

Total SA, Europe's third largest oil company, said a Chinese State-owned fund has acquired a stake in the firm.

"A Chinese State-owned fund has built up a stake gradually over the past few months," Total spokeswoman Patricia Marie said on Friday. She declined to identify the fund or provide the size of the holding.

The Financial Times reported China's State Administration of Foreign Exchange built up 1.6 percent in Total, citing an unidentified source.

Marie said Total welcomes the Chinese investment as a way to "diversify our shareholding and open up to China".

The European Commission has called for an international accord to limit the political influence of sovereign funds, which have grown in number to about 40, managing between $2 trillion and $3 trillion. The US Senate's top tax writers said last month they were reviewing the country's tax policies on sovereign funds.

Total rose 23 cents, or 0.5 percent, to 49.2 euros as of 9:35 am in Paris. The shares have dropped 14 percent since the beginning of the year.

"A stake in a multinational oil company like Total would give a reasonable return to the Chinese and is a good long-term investment," Victor Shum, senior principal at Purvin & Gertz Inc in Singapore, said. "A small stake is not intended to gain management control."

Han Yuting, a spokesman for the Chinese foreign exchange regulator, didn't immediately answer calls to his phone on Friday, a public holiday in China.

China Investment Corp, the nation's $200 billion sovereign wealth fund, last year spent more than $8 billion to buy stakes in Blackstone Group LP, manager of the world's largest buyout fund, and Morgan Stanley, the second biggest US securities firm.