Shandong Steel inks regrouping pact with Rizhao Steel

Tuesday, 08 Sep 2009

It is reported that Shandong Iron & Steel Co Ltd finally signed the official regroup agreement recently with Rizhao Iron & Steel Co Ltd an important local private steelmaker.

According to the agreement, the two mills will jointly launch a new company. Shandong Steel is to invest by cashes and take 67% stake of the company while Rizhao Steel to occupy the rest stake by pouring its net assets in. They made definite contract in regrouping details, and would start up the assets assessment of Rizhao Steel immediately after the signing.

Mr Zou Zhongchen Chairman of Shandong Steel and Mr Du Shuanghua Owner of Rizhao Steel both refused to comment recently when they were asked about the amount of investment.

Shandong Government thinks the completion of reorganizing Rizhao Steel is the base of actualizing the 20 million tonnes per year Rizhao quality steel production base project which needs the joining in of Rizhao Steel, since the state isn’t likely to nod the 20 million tonnes per year project in short term.

Mr Zhao Xiaowei Mayor of Rizhao said the related departments should give support to the quality steel project.

As per report, though the agreement fixes Shandong Steel regroup of Rizhao Steel, there is still a matter left without solution. No plan or agreement is made to deal with the assets, which were used to trade shares of a Hong Kong listed company by Mr Du the chairman of Rizhao Steel.