ArcelorMit­tal dumps stake in­Hu­nan Valin

China Daily (USA) - - BUSINESS - By YANG ZI­MAN yangz­i­man@chi­nadaily.com.cn

In­dian multi­na­tional steel gi­ant ArcelorMit­tal has trans­ferred 1.1 bil­lion yuan ($165.9 mil­lion) worth of shares in Hu­nan Valin Steel Co Ltd to a Chi­nese fund, cit­ing Valin’s main busi­ness shift from steel to fi­nance.

ArcelorMit­tal signed an agree­ment with Shen­zhen Qian­hai Ea­gle Fund Man­age­ment Co Ltd on Tues­day for the sale of its 304 mil­lion A shares.

The shares will be held by China Re­form Fund man­aged by Shen­zhen Qian­hai Ea­gle Fund. The shares ac­count for 10.08 per­cent of the to­tal shares of Valin.

ArcelorMit­tal said that the sale of the shares is be­cause of Valin’s ma­jor as­set re­or­ga­ni­za­tion, which will turn its main busi­ness from steel to fi­nance and en­vi­ron­men­tal man­age­ment.

Valin Steel is a State-owned en­ter­prise based in Hu­nan prov­ince that went pub­lic on the Shen­zhen Stock Ex­change in 1999.

The com­pany an­nounced its re­struc­tur­ing plan in July to re­place some of its steel as­sets with fi­nan­cial and power gen­er­a­tion as­sets. The steel as­sets have been re­moved from the listed com­pany to the group com­pany.

The re­struc­tured busi­ness of the listed com­pany will cover se­cu­ri­ties, trust funds, in­surance and en­ergy-sav­ing power gen­er­a­tion. The new as­sets amount to 13.7 bil­lion yuan.

Valin’s stock was 3.95 yuan per share be­fore the sus­pen­sion in Fe­bru­ary.

Cao Hui­quan, chair­man of Valin, said in July that the re­struc­tur­ing aims to im­prove the prof­itabil­ity of the com­pany.

“The steel in­dus­try faces the chal­lenges of shed­ding ca­pac­ity, low­er­ing the cost, and cut­ting in­ven­tory.

The rev­enue and growth of Valin’s steel busi­ness have touched the ‘glass ceil­ing.’ This sit­u­a­tion is ex­pected to last for sev­eral years,” said Cao.

Valin suf­fered net losses of 2.96 bil­lion yuan in 2015. Its net losses are es­ti­mated at 860 to 960 mil­lion yuan in the first half of this year.

Ac­cord­ing to Cao, the Party com­mit­tee and gov­ern­ment of Hu­nan prov­ince have been very sup­port­ive of the re­struc­tur­ing. The newly in­jected fi­nan­cial and en­ergy-sav­ing as­sets have been quite stable af­ter the re­struc­tur­ing. They are ex­pected to greatly im­prove the prof­itabil­ity of the com­pany, which will ben­e­fit the mar­ket and the share­hold­ers.

Steel­work­ers op­er­ate ma­chin­ery dur­ing the steel-mak­ing process at the ArcelorMit­tal steel fac­tory in

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