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All the three companies are indirectly controlled by the newly established Hebei Iron and Steel Group (HBIS), the country's largest steel producer.
In three separate statements filed with the Shanghai and Shenzhen stock exchanges, they said the consolidation of the two affiliates into Tangshan is an initial step in a groupwide consolidation of major steel production assets.
Tangshan Steel will buy Handan Steel shares at 4.10 yuan per share, or offer 0.775 of its own shares for every share held by the latter.
It will also buy shares of Chengde Xinxin at 5.76 yuan per share, or offer 1.089 of its shares for every share held in the affiliate.
As a result of the restructuring, all assets, liability and employees of Handan Steel and Chengde Xinxin will be injected into Tangshan Iron and Steel, and Tangshan Iron and Steel will become the sole listed unit of HBIS.
The restructuring plan is subject to approval by the state assets regulator and securities regulator.
HBIS officially started operations in June. It currently have seven steel production units, including Xuanhua Iron and Steel Group, as well as a joint venture with Baosteel Group.
According to the statement, HBIS will inject assets of Xuanhua Steel and a stake in the venture with Baosteel into Tangshan Steel sometime after the restructuring.
Shares of the three listed firms will all resume trading from today.
Shares of Tangshan Steel, Handan Steel and Chengde Xinxin last traded at 4.55 yuan, 3.76 yuan and 5.5 yuan respectively.
(1 usd = 6.85 yuan)
zachary.wei@xfn.com
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