Chongqing-based Chinese steel producer Chongqing Iron and Steel Co. (Chongqing Steel) has announced that its reorganization plan has been approved by Chongqing Municipal First Intermediate People’s Court.
According to the plan, Chongqing Iron and Steel Group will sell 2.097 billion shares in Chongqing Steel to bring in the restructuring party, namely, Chongqing Iron and Steel Co., which will pay RMB 100 million ($15.1 million) for the 2.097 billion shares. Meanwhile, the restructuring party promises to invest not less than RMB 3.9 billion ($0.59 billion) to buy the assets of Chongqing Steel auctioned by Chongqing Municipal First Intermediate People’s Court. At the same time, the restructuring party will provide loans for Chongqing Steel with an annual lending rate of not more than six percent, to implement the restructuring plan.
After the reorganization, Chongqing Steel will maintain its steel output capacity of 8 million mt, while it expects to achieve a gross profit of RMB 1.03 billion ($0.16 billion) in 2018.