PZH Steel to get 7.19b yuan asset injection

Panzhihua Iron and Steel Group, which ranks 18th largest in the country, is following in the footsteps of its rivals by injecting its production and mining assets into its listed flagship to create a three-into-one entity.

Shenzhen-listed Panzhihua New Steel & Vanadium (PZH Steel) is getting 7.19 billion yuan (HK$8.04 billion) worth of assets from its parent.

To fund the purchase, it will sell 749.17 million new shares to its state-owned parent at 9.59 yuan each, the world's third-biggest producer of vanadium steel used in railroads, said in a statement filed with the Shenzhen Stock Exchange yesterday.

It also will issue 951.77 million new shares to swap with shares of its two Shenzhen-listed sister companies, Chongqing Titanium and Sichuan Changcheng Special Steel, held by minority shareholders.

For every Chongqing Titanium share, it will offer 1.78 shares, and for every Sichuan Changcheng share, it will give 0.82 share. The two companies will be merged into PZH Steel and will then be delisted.

Minority shareholders of the three listed firms also could choose to receive cash from the parent group's strategic partner, Anshan Iron & Steel Group, at 9.59 yuan each for PZH Steel, 14.14 yuan each for Chongqing Titanium and 6.50 yuan each for Sichuan Changcheng, the statement said.