国内英语新闻：NDRC backs Blackstone for BlueStar deal

The National Development and Reform Commission (NDRC) has given Blackstone Group the green light to buy into and help restructure chemicals giant BlueStar.

The NDRC has formerly approved the US company's agreement to pay $600 million for a 20 percent stake in China National BlueStar (Group) Corp, the State-owned chemicals maker.

According to a notice on the NDRC website, it has given its permission for BlueStar to tap Blackstone as a strategic foreign investor and carry out restructuring.

Blackstone will buy a stake in BlueStar's parent company, China National Chemical Corp, or ChemChina, which will hold 80 percent of BlueStar after the deal.

The move is intended to smooth BlueStar's strategic restructuring, international expansion and public listing in the future, analysts said.

"Attracting private equity (PE) funds can help BlueStar draw investment capital and carry out strategic reform", Cheng Lei, an analyst with Ping An Securities, said.

BlueStar considered several PE funds before choosing Blackstone, the world's largest PE company. BlueStar will become the US company's first investment in China.

Blackstone executives Ben Jenkins and former Hong Kong financial secretary Antony Leung have been appointed by Blackstone to serve on BlueStar's board, the company said.

"We forecast (they) will bring new ideas to the State-owned company and help it transform," said Fu Yunfeng, an analyst with Ping An Securities.

Ren Jianxin, president of ChemChina, said he believes Blackstone has sufficient investment experience in the chemicals industry because of its involvement with Celanese and Nalco.

BlueStar is thirsting for global expansion. In 2004, it showed an interest in buying South Korean Ssangyong Motor Co, but Shanghai Automotive Industry Corp closed the deal instead.

BlueStar's restructuring follows on the heels of the State-owned Assets Supervision and Administration Commission's (SASAC) campaign to strengthen and expand mid-level, State-owned enterprises.

Li Rongrong, minister of SASAC has called on the agency to create 30 to 50 enterprises by 2010, which can rank among the world's top three global players in their sectors.