Angang Steel cleared for dual rights issue to raise 20b yuan

Angang Steel announced last night it had been given approval for the first dual A and H-share rights issue to raise up to 20 billion yuan to finance a production plant in Liaoning province.

The China Securities Regulatory Commission has told the Hong Kong and Shenzhen-listed steelmaker it can issue 1.1 billion shares at 15.40 yuan each to its shareholders and up to 267 million shares at HK$15.91 each in Hong Kong.

The company, the listed unit of the mainland's third-largest steelmaker, secured approval from its shareholders and the State-owned Assets Supervision and Administration Commission in May.

Initially, the company will offer 195.8 million shares in Hong Kong based on 2.2 rights shares for every 10 shares held by qualifying H-share equity owners.

The subscription price represents a discount of 40.1 per cent to the HK$26.56 average closing price of the H shares over the past 20 trading days before the determination of the rights issue price.

The price also represents a 47.14 per cent discount to the stock's close yesterday of HK$30.10, which was up 4.88 per cent on the day.

The company expects to raise about HK$3.05 billion from the H-share issue. Morgan Stanley and Citic Securities are the underwriters.