Chinese steel giant Baoshan Iron and Steel Corporation ltd. (Baosteel) has declared it has no plans to intervene in the planned merger between Shandong Province-based Chinese steelmaker Shandong Iron and Steel Corporation Ltd and Rizhao Iron and Steel Corporation Ltd. (Rizhao Steel).
A rumor has lately been circulating in China that Baosteel will restructure Rizhao Steel instead of Shandong Steel. While Baosteel has rejected this rumor, Shandong Steel general assistant manager Wan Luyu has also said that Shandong Steel's restructuring plans with Rizhao Steel are continuing without change.
Rizhao Iron and Steel is one of China's most profitable privately-owned steel mills. In the first quarter of this year, it reaped a net profit of RMB 600 million ($90 million). State-owned Shandong Iron and Steel was established last year through the merger of two major steel mills, Laiwu Steel Group and Jinan Iron and Steel Group, in Shandong Province. It has a registered capital of RMB 10 billion ($1.5 billion).