In order to speed up the construction of a world-class mining development enterprise, Benxi Iron and Steel Co., LTD. (000761) plans to exchange assets with Benxi Iron and Steel Co., LTD., the controlling shareholder, intends to place the assets into the mining assets subordinate to Benxi Iron and Steel Co., LTD., and intends to place the assets into all the steel businesses of the listed company.
According to data released by the China Metallurgical Mining Enterprises Association in 2021, Bensteel Mining ranked fourth among related mining companies in China with a revenue of 7.7 billion yuan at that time. Moreover, the top two, Angang Mining and Bensteel Mining, are both owned by Angang Group.
However, the major asset restructuring is still in the planning stage, the two sides have not signed an agreement of intent, there are still major uncertainties in the transaction, according to the relevant suspension and resumption of trading regulations of the Shenzhen Stock Exchange, the company's shares will not be suspended.
Previously, since February 20, the price of steel plate has jumped as much as 40 per cent.
Proposed replacement of mining assets with controlling shareholders
Shares had jumped 40% before the announcement
On the evening of March 20, the company announced that in order to better utilize the function of the capital market to support the development of the real economy, accelerate the construction of a world-class mining development enterprise, and play the basic, key and "ballast stone" role of domestic iron ore resources, the company plans to exchange assets with Benxi Iron and Steel, the controlling shareholder, and the balance between the assets to be put in and the assets to be put out. To be made up in cash by one party to another.
After preliminary planning, the assets to be placed in the company are related to the mining subordinate of Benxi Iron and Steel, and the assets to be placed in the company are all related assets and liabilities of the steel business of the listed company.
However, the asset replacement involved in the specific range of assets, still need to be further determined by both sides of the transaction.
Steel Sheet emphasizes that the transaction is still in the planning stage, and the transaction plan still needs further discussion, communication and negotiation, and the necessary decision-making and approval procedures in accordance with relevant laws, regulations and the company's articles of association; And the company has not yet signed an agreement of intent with the counterparty for this transaction.
Therefore, the steel plate prompts, this transaction related matters still exist significant uncertainties, according to the "Shenzhen Stock Exchange self-Regulatory Guidelines No. 6 - Stop and resume trading" relevant provisions, the trading company's shares do not stop trading.
The announcement follows a 40 per cent rise in the share price since February 20.
Meanwhile, on the second day after the company's stock price rose by the daily limit on February 27, Benxi Steel received a joint investigation from 16 institutions, including CITIC Construction and Investment Bank and HSBC Bank in Benxi, Liaoning Province.
In the investigation, the board said that the actual controller of Angang Group holding shares of Angang steel and steel plate, there is competition with the board: the main products of hot rolled plate, cold rolled plate, galvanized plate and steel plate there is competition; Sales area, and the main sales area of this steel plate are northeast, East China, there is industry competition.
In order to avoid industry competition, Angang Group promises that it will, in accordance with the requirements of current laws and regulations and relevant policies, within 5 years from the date of the letter of commitment, and strive to use a shorter period of time, comprehensive use of assets reorganization, business adjustment, entrusted management and other ways, to steadily promote the integration of related businesses to solve the problems of industry competition.
In 2021, the State-owned Assets Supervision and Administration Commission of Liaoning Province, the original actual controller of Bensteel Sheet, transferred its 51% equity of Bensteel Group to Angang Group for free, and Angang Group became the indirect controlling shareholder of the company. At that time, Anshan Steel Group in order to avoid competition matters, made relevant commitments.
Benjiang Mining industry ranks fourth
According to the official website of Benxi Iron & Steel Group, Benxi Iron & Steel (Group) Mining Co., LTD. (hereinafter referred to as Benxi Iron & Steel Mining Co., LTD.) was established on December 28, 1995. In the process of enterprise reform, the company will be integrated in May 2020. As a wholly-owned subsidiary of Anshan Iron and Steel Group, the company was reorganized on November 10, 2021.
The iron ore resources controlled by Bensteel Mining Company are rich, mainly distributed in Benxi City and Liaoyang City. Currently, the actual controlled resources are 1.48 billion tons, and the potential reserve mine resources are 9.57 billion tons. Now there are 9 grassroots units, including Nanfen open-pit iron mine, Waitoushan Iron mine, Jiajiapu Iron mine, Beitai Iron mine, etc. In 2021, Bensteel Mining produced 8.19 million tons of iron concentrate, 2.16 million tons of pellets and 1.36 million tons of quicklime.
According to the industry ranking released by China Metallurgical Mining Enterprise Association in 2021, Bensteel Mining Industry ranks the fourth among domestic iron and steel mining companies with an operating income of 7.7 billion yuan. Leading the list were Angang Mining, Tisco Mining and Shougang Mining, with revenues of 18.5 billion yuan, 11.1 billion yuan and 9.3 billion yuan, respectively. Hainan Mining, an A-share listed company, ranked 12th in the ranking.
Among them, Angang Mining and Bensteel Mining, both belong to Angang Group.
It is worth noting that since November 2022, iron ore futures prices have continued to surge, rising more than 50% in more than four months.
The Platts 62 per cent iron ore Price index, a benchmark for pricing imported iron ore, rose 58.2 per cent in the four months from early November 2022 to the end of February this year, the biggest increase in the index's history.
In this regard, the National Development and Reform Commission has warned five times since 2023. Recently, on March 17, the Price Department of the National Development and Reform Commission, together with relevant parties, went to Qingdao Port and Tangshan Port to conduct research, learn about iron ore inventories and stockpiling charges at the ports, analyze and evaluate the situation of the iron ore market and price, and study the work of maintaining supply and stabilizing price of iron ore. During the period, the research group organized some iron ore trading enterprises to hold special meetings to remind and warn iron ore trading enterprises to operate according to law and not to hoard and drive up prices.
