On March 21, Hong Kong-based conglomerate CITIC Pacific, whose main businesses are in special steel production and iron ore mining, stated that it has signed a framework agreement for the sale of 80 percent of Hebei-based Chinese steel producer Shijiazhuang Iron and Steel Co., Ltd (Shigang) for RMB 1.9 billion ($278.28 million) to Chinese steelmaking giant Hebei Iron and Steel Group.
The 80 percent stake in question consists of a 65 percent stake held by CITIC Pacific, with the remaining 15 percent owned by Zhongfu Investment Company. In the agreed framework deal, CITIC Pacific is acting as agent for Zhongfu, which is owned by several high-level managers and officials of Shigang. According to the agreement, the the 65 percent stake of CITIC Pacific is worth RMB 1.58 billion ($231.41 million).
Shigang produces special steel for the automotive industry, with an annual capacity of 2.6 million mt. In 2009, Shigang produced 1.84 million mt of crude steel and 1.75 million mt of finished steel.