The company Chongqing Iron and Steel plans to leave metallurgical business
According to Reuters, the company is Chongqing Iron and Steel plans to exit the steel business. The Chinese company from Chongqing leaning towards this solution because of the loss of activity. Leaving the steel industry, the company will be able to focus on other activities. In particular, in the financial sector. The company’s shares quoted on the Hong Kong and Shanghai stock exchange. The company is a steel mill. Its annual production capacity is over 3 million tons of steel. Chongqing Iron and Steel manufactures wide range steel products. The list includes wire rod, steel plate, commodity billet, rolled steel. This also applies to steel for the shipbuilding sector. 2015 resulted in the company reporting a net loss. It reached almost 6 billion yuan. In dollar terms it is about 900 million USD. In the first quarter of 2016, the financial losses of the company amounted to slightly less than 1 billion yuan. On the stock exchange in Shanghai in June 2016 suspended trading in shares of the company.
The company’s management evaluates the feasibility of own metallurgical assets. The buyer is a company Yufu Group. Its operation is regulated by the city administration of Chongqing. The proceeds from the sale of assets the company plans to invest in financial activities. In particular, the acquisition of the municipal government of the enterprises in the industrial and financial sectors.
Western analysts gave their assessment of the situation. Upcoming surgery can turn into a beneficial solution to debt problems steel companies in China. Many involved in the financing of major projects involving the expansion of capacity. At the same time in case introduced with borrowed money. Now these companies have a number of difficulties in respect of repayment of loans. Chinese authorities are considering the possibility of transmission of such companies under the wing of the creditors. Alternatively, control may be given public funds.
Not one of Chongqing Iron and Steel is planning to go out of business. The metallurgical sector can leave and Valin Iron and Steel Group. The company today is one of the leaders of the metallurgical sector. World Steel Association announced that in 2015, the company enterprises produced 14.9 million tons of steel. According to the results, the company ranked 12th position in the ranking of the PRC. The group claims about a possible sale of loss-making steel assets.