The reorganization plan for Shanxi Province-based Chinese steel producer Shanxi Haixin Iron and Steel Group Co. (Shanxi Haixin Iron and Steel Group) has been granted approval by Yuncheng City Intermediate People’s Court of Shanxi Province, as announced by Xinhua News Agency on September 29.
Shanxi Haixin Iron and Steel Group was once the largest private enterprise in Shanxi Province and also the second largest private sector steel company in China. However, due to overcapacity in the steel industry amid the sluggish market performance in China and financial mismanagement, the company was forced to shut down on March 19, 2014.
Beijing-based Chinese company Jianlong Group has inked a preliminary agreement with Shanxi Haixin Iron and Steel Group, according to which Jianlong Group’s subsidiary Jilin Province-based Jianlong Iron and Steel Co. (Jilin Jianlong Steel) will invest RMB 2.5 billion ($0.40 billion) in Shanxi Haixin Iron and Steel Group. Accordingly, Shanxi Haixin Iron and Steel Group will become the wholly-owned subsidiary of Jilin Jianlong Steel and will receive debt financing support from Jianlong Group. In addition, after the completion of the reorganization, Shanxi Haixin Iron and Steel Group will change its name to Shanxi Jianlong Iron and Steel Co. (Shanxi Jianlong Steel).
Meanwhile, Jianlong Group plans to restart operations at Shanxi Haixin Iron and Steel Group’s rebar and wire rod production line before the end of the current year, while the plate production line is expected to resume production before the end of 2016 depending on the market situation.