It is reported that Mr Tian Zhiping Vice GM of Hebei Iron and Steel Co Ltd responds that everything is still in the air when asking some details on the event of Baosteel's withdrawal from Handan Baosteel Ltd-the joint venture. The results will be come out by the end of this June, but Hebei Steel hopes Baosteel would keep holding the stocks as before, Shanghai Securities News reported.
The JV signed by Baosteel and Handan Steel Group in May 10th 2007 aims to construct new steel base of the latter. It was registered with CNY 12 billion with taking 50% stocks each party. What's more, the 4.6 million tonnes of fine quality slabs base is invested with the total capitals of CNY 19.4 billion.
The insiders from the steel industry in Hebei province view that, the plan at that time was combined with the developments of Handan Steel and Tangshan Steel, but Tangshan Steel has regrouped with Xuanhua Steel and Chengde Xinxin Vanadium and Titanium Co. The high leaders believe the united organization is the best way for the development, so, of course, along with consolidation of Hebei Steel Group, Baosteel has basically lost this market it once coveted.
Baosteel's retreat, if it's true, would lie more in its strategic adjustment in north China market. In the mean time, Hebei Steel Group may pay out nearly CNY 1 billion of the funds, and naturally Hebei Steel is hard to take out such huge capitals under the economic downturn at present, hopefully Baosteel would stay behind, the insiders talked.
Mr Tian says, the talks are still going on, and both sides haven't reached any common consensus on the problems on the assets and prices.
According to a securities analyst Mr Liu, Hebei Steel is certain to take over and owns the stocks of Handan Baosteel Ltd. Otherwise, some news revealed both of them have basically drawn together on the retreat event.
The first-stage project of the JV has formed a completed production line on October 17th Last year, with HR sheets of 4.5 million tonnes per year. At the same time, the second-stage project, with the investment of CNY 6 billion is planned to finish construction by 2010, focusing on manufacturing high end steel products.
(Sourced from.Mysteel.net)
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