Bengang Steel Plates has announced a major A-share issuance plan that will pay for the purchase of US$1.29 billion of assets from its parent company, the South China Morning Post reported. Chairman Li Mohua said Bengang would issue two billion new yuan-denominated A-shares to Benxi Iron and Steel Group, while focusing on an upcoming merger deal with larger rival Anshan Iron & Steel Group Corp. "This will maximize our value for all our shareholders," Li said. Benxi and Anshan will merge, on the orders of the central government, to improve competitiveness in the industry and curb overinvestment. Li said Beijing hopes the combined firm will produce 30 million tones of steel a year by 2010.
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