Shaoguan confirms Baosteel venture

http://www.chinaccm.com 2006-7-12 10:58

 ¡¡ Shaoguan Iron and Steel Group is working with Baosteel Group to 
build a plant in southern China, Shaoguan Iron's listed unit confirmed
 
yesterday, while denying any merger between the two companies. 

    Media reports last week said the two steel mills' cooperation on 
the Zhanjiang steel plant was the lead-in for a takeover of Shaoguan 
Iron by Baosteel. 

    "Baosteel and Shaoguan Iron have been working together all along 
but are just at the beginning stages of the Zhanjiang joint venture 
project, which is still not certain to be approved," Shaoguan Iron 
and Steel Co., which lists yuan-denominated A shares in Shenzhen, 
said in a statement to the Shenzhen Stock Exchange yesterday. 

    "To date, Baosteel and Shaoguan Iron have not signed any legal 
agreement" to merge, the statement added. 

    Several domestic newspapers said the two companies had signed a 
restructuring deal that would take the Zhanjiang cooperation a step 
further, with the ultimate goal of a takeover by Baosteel. 

    Baosteel, parent of Shanghai-listed Baoshan Iron and Steel Co., 
has sought Central Government permission for more than a year to 
build a plant in Zhanjiang. With an initial capacity of 10 million 
tons, the project would benefit from a shorter shipping distance 
for iron ore supplies from Australia and elsewhere. 

    Source: Shenzhen Daily