According to the latest notice by Shanghai Assets and Equity Exchange that, 45% stake of Jiangsu Xigang Group Co Ltd is on sale for CNY 532 million.
The equity structure of the company is clearly manifested in the notice Hunan Valin Iron and Steel Group taking 55%, China Conic Import & Export Co Ltd holding 44.55% with the left 0.45% owned by Kangmao Import & Export Co Ltd. It is the latter two who are scheming to sell their 45% shares.
Interestingly, this equity transfer bid can be traced back to the public notice of December 26 by Hunan Valin Steel Co Ltd. It said on that day that in light of the overall strategy of its steel tube business and after consultation with Valin Group and the other two, Conic and Kangmao both dominantly held by China Resources, it planned to set up a holding company, Valin Tube Holding Company, through capital increase which will come from its held 67.13% stake of Valin Tube, Valin Group 55% of Xigang and the 45% of the above two members of China Resources.
Data shows that Xigang Group, founded in 1958 with registered capital of 1.18bln yuan, is categorized in the national 72 major steel enterprises and 18 key special steel enterprises. In Jul 2007 Valin Group acquired 55% of Xigang Group and made a promise that it would sell the 55% to Valin Steel or inject it to some other uninterested company in three years, to avoid possible industrial competition with Valin Steel.
On Dec 26 of last year, Valin Steel said in its public notice that Xigang Group is strategically significant for its development in tube business. Their seamless steel tube products can make supplementation for each other, and the location of Xigang in East China can be a making up in its marketing layout. But if Valin Group sells the equity to another uninterested party, that will not only do no good to its development but will engender another competitor for it.
Now China Resources is clear to quit from this contest. But there is a special and somewhat strict term listed in the transfer conditions that the buyer must make written pledge that it will resume and implement the arrangement and promise made December 25 2010 by Valin Steel and the two assignors that the acquired equity should be injected to Valin Tube Holding Company.
As per Valin Steel, Xigang Group, busy in moving and rebuilding project is expected to start operation the first season of this year in the new site and will build up an annual capacity of 700,000 tonnes of seamless steel tube and 800,000 tonnes of bar products. The group earned income of CNY 1.4 billion in the first three seasons of 2010 and realized net profit of CNY 50.53 million. Its net assets registered CNY 1.12 billion on September 30 2010.
(sourced:Shanghai Securities News)
The equity structure of the company is clearly manifested in the notice Hunan Valin Iron and Steel Group taking 55%, China Conic Import & Export Co Ltd holding 44.55% with the left 0.45% owned by Kangmao Import & Export Co Ltd. It is the latter two who are scheming to sell their 45% shares.
Interestingly, this equity transfer bid can be traced back to the public notice of December 26 by Hunan Valin Steel Co Ltd. It said on that day that in light of the overall strategy of its steel tube business and after consultation with Valin Group and the other two, Conic and Kangmao both dominantly held by China Resources, it planned to set up a holding company, Valin Tube Holding Company, through capital increase which will come from its held 67.13% stake of Valin Tube, Valin Group 55% of Xigang and the 45% of the above two members of China Resources.
Data shows that Xigang Group, founded in 1958 with registered capital of 1.18bln yuan, is categorized in the national 72 major steel enterprises and 18 key special steel enterprises. In Jul 2007 Valin Group acquired 55% of Xigang Group and made a promise that it would sell the 55% to Valin Steel or inject it to some other uninterested company in three years, to avoid possible industrial competition with Valin Steel.
On Dec 26 of last year, Valin Steel said in its public notice that Xigang Group is strategically significant for its development in tube business. Their seamless steel tube products can make supplementation for each other, and the location of Xigang in East China can be a making up in its marketing layout. But if Valin Group sells the equity to another uninterested party, that will not only do no good to its development but will engender another competitor for it.
Now China Resources is clear to quit from this contest. But there is a special and somewhat strict term listed in the transfer conditions that the buyer must make written pledge that it will resume and implement the arrangement and promise made December 25 2010 by Valin Steel and the two assignors that the acquired equity should be injected to Valin Tube Holding Company.
As per Valin Steel, Xigang Group, busy in moving and rebuilding project is expected to start operation the first season of this year in the new site and will build up an annual capacity of 700,000 tonnes of seamless steel tube and 800,000 tonnes of bar products. The group earned income of CNY 1.4 billion in the first three seasons of 2010 and realized net profit of CNY 50.53 million. Its net assets registered CNY 1.12 billion on September 30 2010.
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