China Hongqiao to buy controlling stake in downstream operator Loften for 10 billion yuan
The world’s largest aluminium smelter will own 73.7 per cent of aluminium sheets maker Loften after deal aimed at improving ‘product mix’
China Hongqiao, the world’s largest aluminium smelter that has been fighting accusations of impropriety, has announced it will spend 10 billion yuan to take control of downstream operator Loften Environmental Technology.
Shandong province-based Hongqiao, 81.1 per cent controlled by mainland tycoon Zhang Shiping, agreed on Monday to buy 1.6 billion new shares of Shenzhen-listed Loften at 6.23 yuan each, for a 63.4 per cent stake, the company said in a filing to Hong Kong’s stock exchange on Tuesday.
Together with 261.1 million shares Hongqiao agreed in mid-August to buy from Loften’s controlling shareholder Yu Rongqiang at 3.64 yuan each, Hongqiao will own 73.7 per cent of Loften after both deals are completed.
The firm did not say in its filing how it plans to finance the acquisition of Loften. It had 12.5 billion yuan of cash and 12.6 billion yuan committed to spending on property, plant and equipment on June 30. Its net debt-shareholders’ equity ratio stood at 130 per cent.
Hongqiao’s shares closed 0.7 per cent lower at HK$7.25 on Tuesday.
Boxing, Shandong-based Loften, an aluminium sheets maker, on Monday also agreed to acquire from independent third party Binzhou Hengwang all of Innovative Metal for 7 billion yuan.