Shanghai Securities News reported that one of the largest domestic private enterprises Fosun Group encountered setback in acquiring controlling stake in the state owned steelmaker Tianjin Tiangang Group Co ltd.

Last June, Fosun's company in Tianjin inked a JV agreement with another private mill Tianjin Aoxin Investment Co Ltd signing to regroup Tiangang Group and have its registered capital increase from CNY 3 billion to CNY 8 billion with Tiangang Group taking 48.5%, Fosun Tianjin 47.5% and Tianjin Aoxin 4%.

The regrouping had no fruit halt a year from the pact signing, as Tianjin Aoxin later sold its shares to Tiangang, making it the controlling holder in the new mill once sets up.

As reported, Fosun wasn't informed of the stake transfer, and obviously it has lost chances to increase its shares. Meanwhile, Tiangang had required revaluating its assets as the prices during the pact signing were higher than in 2007 when the evaluation was made. The stalemate lasted till the market changed later last year.

The paper said now, it's more difficult for Fosun to take part in Tiangang regrouping, as the new steel industry plan has said to promote consolidation of Tianjin Pipe, Tiantie, Tiangang and other local mills. It's noteworthy Fosun and Jianlong, the two big private mills, sold Ningbo Steel shares to Baosteel a week before, noting that there are many differences in ideas and management between state-owned and private enterprises and it's really hard to take control for the latter.

(Source: Shanghai Securities News)