Chinese Jiangsu-based copper pipe producer ST Zhang Copper announced on May 21 that China's Securities Regulatory Commission has approved the application of Shagang Group, the largest private steel enterprise in China, also based in Jiangsu, to take a controlling stake in ST Zhang Copper.
Accordingly, ST Zhang Copper will issue 1.178 million shares to Shagang Group to enable it (i.e., ST Zhang Copper) to purchase a 63.79 percent stake (evaluated at approx. RMB 2.096 billion) in Huaigang Special Steel, which is currently owned by Shagang.
Following the transaction, Shagang will hold a 74.84 percent stake in ST Zhang Copper, becoming the controlling shareholder of the latter.
Huaigang Special Steel is located in Huaian, Jiangsu, with a total capital of RMB 15.305 billion ($2.2 billion), mainly producing high quality special steel for spring, bearing, alloy pipe billet and automobile applications. In 2009, the company produced 2.8743 million mt of crude steel, up 6.37 percent, 2.67 million mt of finished steel, up 13.76 percent and 2.754 million mt of pig iron, up 9.58 percent, all compared with the corresponding period of 2008. The company expects a sales revenue of RMB 14 billion ($2.05 billion) in 2010.