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Mill to put stakes in listed unit

HEBEI Iron and Steel Group, a leading mill in north China, plans to inject two steel businesses into its listed unit to boost competitiveness.

Hebei Steel will inject its stakes in Wuyang Iron and Steel Co and Xuanhua Iron and Steel Co into the listed Tanshan Iron and Steel Co, Tangshan Steel said in a statement to the Shenzhen Stock Exchange yesterday.

Wuyang Steel, 53.1 percent owned by Hebei Steel, produced 2.48 million tons of steel in 2008 and the wholly-owned Xuanhua Steel made 5.2 million tons.

Wuyang Steel makes plates that can be used in shipbuilding, machinery and defense equipment while Xuanhua Steel produces rebars and steel wire rods used by the construction industry.

As Wuyang Steel is very competitive in China's plate market and domestic demand for construction steel is relatively strong, the injection would boost the asset quality of the listed unit, said Le Yukun, an analyst at BOC International.

China is consolidating its steel sector to make it more competitive globally. Late last year Hebei Steel announced a plan in which Tangshan Steel will take over two other listed units, Handan Iron & Steel Co and Chengde Xinxin Vanadium & Titanium Co, via a share swap.

Hebei Steel was formed in June last year after a merger of major mills in Hebei, China's top steel producing province.

Tangshan Steel closed 0.68 percent higher at 7.43 yuan yesterday.


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