According to the announcement released by Hunan Province-based Chinese steelmaker Valin Iron and Steel Group, on September 27 its board of directors discussed the proposal to incorporate and restructure domestic steelmaker Jiangsu Xigang Group. During the discussion, five directors appointed by foreign shareholders (notably global steel giant ArcelorMittal) all voted against the proposal, while the other four directors approved it. Accordingly, the proposal was rejected.
The reasons given by the foreign shareholders' representatives were that, although Valin Iron and Steel Group's financial performance has improved sharply as compared to last year, its capacity for earning profits is still insufficient. Also, while Xigang Group is undergoing a relocation project at the current time, it is not clear whether it will be able to make a profit this year. They also said that it is critical for Valin Iron and Steel Group at the current time to reduce losses and increase profits.
Tags: Europe , Southeast Asia , ArcelorMittal , fin. Reports