December 02, 2008

Panzhihua Steel to streamline steel assets into listed arm

Interfax reported that Panzhihua Iron and Steel Group Company a leading steelmaker in southwestern China intends to streamline its steel assets into its Shenzhen-listed subsidiary, Panzhihua New Steel & Vanadium Company Ltd.

Pangang's steel assets are currently split between three listed subsidiaries, namely PSV, Pangang Chongqing Titanium Industry Co. Ltd and Pangang Sichuan Changcheng Special Steel Co Ltd which has led to relatively high costs and low efficiency.

According to a Shanghai Securities News report, Pangang plans to transfer all its steel assets to PSV in order to improve competitiveness, and will keep in line with guidelines from both the State-owned Assets Supervision and Administration Commission and the China Securities Regulatory Commission.

Chongqing Titanium official who asked remain anonymous said "The group's scheme to combine all steel assets into one listed company hasn't been entirely nailed down yet. The group in still working on the scheme and once an initial plan is formulated the three listed subsidiaries will resume trading again.

Pangang's listed subsidiaries, PSV, Chongqing Titanium and Changcheng Special Steel suspended trading on August 13th 2007 due to the asset listing scheme.

Pangang is also in the process of carrying out a 5% cost reduction program for this year consisting of technical upgrades as well as increased coordination between raw material supplies, production, transportation and sales.