21st Century Economic Herald reported that Shagang Group, China largest private steelmaker is buying into Jiangsu Xixing Steel and will soon launch Jiangsu Shagang Group Xixing steel co ltd as the business is close to the end.
As per report, the two sides already come to a recombination agreement at present. Shagang notes that the mill will purchase shares of Xixing Steel to be the dominant shareholder of the latter.
Mr Qian Zheng investment director of Shagang and principal of the acquisition said the ceremony of launching a new company will be held on January 24th. However, He denies revealing Shagang detail payout to Xixing Steel and the amount of shares of Xixing Steel which Shagang will take after the buying.
Shagang said that the mill will gain 1 million tonnes per year capacity after the acquisition, increasing its total annual capacity to 35 million tonnes. As learned, besides Shagang, Only Baosteel, Hebei Steel and Anshan Steel post over 30 million tonnes per year capacities in China.
Shagang hasn’t disclosed the purchasing price of Xixing Steel yet. The media learns from the inside of Shagang that the price is not high and the payout is mainly from the company’s owned funds.
An official from Shagang said the acquisition lasted for almost one and half years since September 2008. The official adds Mr Shen Wenrong chairman of Shagang would take up the post of board chairman of the new Xixing Steel. The main leading group of Xixing will remain in their offices. However, the product mix of Xixing Steel will be renewed, though the company will continue to produce special steel as the main products.
Shagang noted to further optimize the stock ownership structure and the production structure under Xixing Steel in order to strengthen up the mill’s capacity in producing high end steel products and quality tube blank.