Guangxi Province-based Chinese steelmaker Liuzhou Iron and Steel Co., Ltd announced on October 9 that it will inject RMB 5.15 billion ($0.73 billion) into Guangxi-based Guangxi Iron and Steel Group (Guangxi Steel Group), to obtain 27.78 percent equity in the group.
This move is in line with the central government’s guidance of a sector-wide consolidation of a group of mostly state-owned companies, i.e., merging smaller steelmakers with larger rivals and shutting down less-efficient capacity, to realize industrial upgrading.
Liuzhou Steel stated that it has a plan to acquire all equity in Guangxi Steel Group within five years after the completion of the Fangchenggang production base. This base belongs to Guangxi Steel Group, with an overall investment of RMB 31.8 billion ($4.46 billion) and an annual finished steel capacity of 9.19 million mt, and will be put into operation by the end of 2019.
After the abovementioned injection of funds, Liuzhou Iron and Steel Group, Wuhan Iron and Steel Group and Liuzhou Iron and Steel Co., Ltd will respectively hold 60.76 percent, 11.46 percent and 27.78 percent in equity of Guangxi Steel Group.
