Guangdong Province-based Chinese steel rolling and processing company SGIS Songshan Co., an affiliate of Guangdong-based Chinese steel producer Shaoguan Iron and Steel Co. (Shaogang), has announced that it has decided to issue a total of 750 million non-public shares worth RMB 1.5 billion ($240 million) for Shaogang at RMB 2 ($0.32) per share, in order to supplement its own liquidity.
Shaogang will purchase the shares via cash within three years, increasing its stake in SGIS Songshan from 36.27 percent to 56.02 percent.
SGIS Songshan also needs the capital raised from the share issue to improve its resistance to risks, especially during the current economic slowdown.