Chinese steelmaker Beijing Shougang Co has announced that the Reorganization Examination Committee of China Securities Regulatory Commission approved its planned asset swap with its parent company Shougang Group. On August 23, 2012 Beijing Shougang’s asset swap plan was approved at a general meeting of shareholders.
Accordingly Beijing Shougang Co will transfer assets including its iron making plant, coking plant, steelmaking plant No 2, high speed wire rod plant and wire rod plant No 1 and all shares it holds in Beijing Shougang Jiahua Building Materials Co and Beijing Shougang Fulushi Color Coating Sheet Co to its parent Shougang Group while it will receive the assets of Qian’an Iron and Steel Co from Shougang Group. Most of the assets which Beijing Shougang will transfer are not currently operating while it is expected that the company will increase its profitability with the acquisition of Qian’an Iron and Steel.
The assets of Qian’an Steel are valued at CNY 18.369B. Meanwhile Beijing Shougang Co will also issue 2.808 billion shares to Shougang Group at a price of CNY 4.29 per share. Furthermore Shougang Group will offer compensation of CNY 1B to Beijing Shougang in relation to the cancellation of a land lease agreement.
Qian’an Steel currently has an annual output capacity of 7.8 million tonne of pig iron 8 million tonne of crude steel and 7.8 million tonne of hot rolled steel. By the end of 2012 it added an annual output capacity of 1.2 million tonne of cold rolled silicon steel.
