SteelOrbis Shanghai
According to Shandong provincial government's Assets Supervision and Administration, the restructuring plan for Jinan Steel and
Laiwu Steel is now being implemented, having received the provincial government's stamp of approval. The new Shandong Iron & Steel Group is scheduled to be set up in due course after the 2007 Spring Festival.
According to the restructuring plan, the Shandong Iron & Steel Group will be a state-owned holding company, comprising the two above-mentioned mills. Once the time is ripe, this new group will become a holding company directly owned by the two listed companies - Jinan Steel and
Laiwu Steel.
Previously, market reports indicated that difficulties regarding personnel issues had obstructed the restructuring efforts. The provincial government has now denied this, explaining that the suspension of work resulted from the thorough assets assessment of the two mills conducted by the relevant authorities from September 2006. The work in question was fully completed by December 12, 2006.
The establishment of the Shandong Iron & Steel Group is sure to influence Arcelor-Mittal's efforts to purchase a stake in
Laiwu Steel. At the end of December,
Laiwu Steel released an announcement to the effect that since the purchase deal was still awaiting government approval, the two parties planned to extend a share sale agreement so as to ensure a smooth approval process.