Baosteel Group will take a 51% stake in a mid-sized steelmaker Shaoguan Steel in Guangdong province as part of the country's steel restructuring plan.

SGIS Songshan Co Ltd, the listed unit of Shaoguan Steel, said in a filing to the Shenzhen Stock Exchange that the free transfer of the stake is still subject to approval from state assets regulator.

Baosteel Group agreed to set up a joint venture named Guangdong Steel Group in mid 2008, by controlling 80% stakes with Guangzhou Steel and Shaoguan Steel, owning the remaining 20%, in a move to run the costal Zhanjiang project in the region.

Guangzhou Steel and Shaoguan Steel, both in Guangdong province and owned by the provincial government asset authorities, will withdraw their stakes from Guangdong Steel Group.

Baosteel Group set up wholly owned Zhanjiang Steel in April to begin building some facilities in preparation for the integrated Zhanjiang project, with a target annual capacity of 10 million tonnes.

The change in the restructuring move is not expected to affect its plan to operate the project.

Baosteel Group earlier said it expected to obtain regulatory approval for the project this year.

However, SGIS did not disclose the reason for the change in the restructuring plan by Baosteel.

(Sourced from Reuters)