ArcelorMittal to dilute stake in China Oriental
ArcelorMittal, the world's largest steel producer, will seek to dilute its stake in China Oriental Group, a Hong Kong-listed mainland steel-maker, to meet regulatory requirements on a public float.
This comes after ArcelorMittal and other shareholders - whom market watchdog the Securities and Futures Commission regards as related parties - accumulated a combined 92 per cent stake in China Oriental following a mandatory offer to buy all the shares owned by minority shareholders.
To maintain the minimum 25 per cent public float, ArcelorMittal may sell down its stake, and will discuss with China Oriental to see if it wants to issue new shares to fund business development.
ArcelorMittal bought a 28 per cent stake in September last year from China Oriental's former second-largest shareholder Diana Chen Ningning, for US$647 million or HK$6.12 a share after her failed takeover.
The SFC then ordered ArcelorMittal to give minority shareholders an equal offer giving them the choice to sell out, since ArcelorMittal had discussed with the largest shareholder Han Jingyuan on co-operating to defeat Ms Cheng's takeover attempt.
ArcelorMittal and Mr Han were deemed 'parties acting in concert', according to the SFC.
China Oriental said shareholders owning 557.37 million shares had accepted the offer, which saw ArcelorMittal and Mr Han's combined stake rise to 92.1 per cent from 73.07 per cent.
China Oriental directors have a 0.3 per cent stake and public shareholders hold 7.6 per cent.
After defeating Ms Chen's hostile takeover attempt, Mr Han said the company planned to boost annual production capacity to more than 10 million tonnes by 2010 through organic expansion and mergers and acquisition, from 4.3 million tonnes last year. He also pledged to raise the company's dividend payout ratio which stood at 15.6 per cent in 2006.