BAOSHAN Iron and Steel Corp, China's second largest steel maker, will take a three per cent stake in reinforcing bar trader Van Shung Chong Holdings, which is seeking a listing on the stock exchange. Van Shung Chong will place 7.4 million new shares at $1.08 each with Baoshan Iron and Steel. The total cost for the three per cent stake will be about $8 million. The shareholding link-up will set a stage for further co-operation between the two companies, which are now engaged in a joint venture in Shanghai for trading of reinforcing bars and steel products. In a simultaneous move with the placement, Van Shung Chong next week will offer 61.67 million new shares at $1.08 each for public subscription. The new issue, representing 25 per cent of its enlarged share capital, is priced at a price-earnings multiple of 6.8 on a weighted average and 8.3 on a fully diluted basis. The new issue and placement will raise a total of $74.6 million, before expenses, to fund the company's expansion in Hong Kong and China. Van Shung Chong has an adjusted net tangible asset value of 56 cents per share, and commands a prospective dividend yield of seven per cent. The group is forecasting a profit of not less than $30 million for the year to March 31. It reported a profit of $21.7 million and a turnover of $456 million for the year to March 31 last year. The new issue is sponsored by New China Hong Kong Corporate Finance. Van Shung Chong is planning to establish an integrated warehouse and service centre in the Shanghai Outer Gaoqiao Free Trade Zone. It imports products from more than 10 countries. including Brazil, Canada, Czechoslovakia, Italy, Luxembourg, Mexico, South Africa and Turkey.