Yanion International Holdings will raise $780 million by placing up to 1.3 billion new shares to buy a medium-sized mainland steel plant.
Shareholders yesterday approved the deal which would leave Yanion holding 52.6 per cent of Minmetals Yingkou Middle Plate in Liaoning province through subsidiary Guohua International Investment.
The acquisition will be paid for with $50 million cash and partly by the allotment of 22.7 per cent of Yanion's enlarged share capital.
In addition, $600 million would be injected into the steel firm to expand capacity after the completion of the transaction, the company said.
Minmetals Yingkou, located near the Bohai Sea, has a workforce of more than 1,400 and produces mainly medium steel plates.
Its annual capacity of medium steel plates is 1.2 million tonnes and two million tonnes of steel slabs.
Last year, the plant produced 800,000 tonnes of medium steel plates and earned after-tax profit of 190 million yuan. Its profit ratio of 20 per cent to 25 per cent is seen to continue.