UpdateChalco shares notch moderate gain following asset swap with parent company
Chalco is set to book a HK$1 billion paper gain following an asset swap with its parent company, helping to offset expected losses on the back of weak aluminum prices
Shares of Aluminum Corporation of China, also known as Chalco, bucked the market’s decline after the company announced it had entered into three transactions with its parent that would enable it to book HK$1 billion of gains this year, which would help offset a major loss expected by analysts on the back of weak metal prices and oversupply.
Shares of the nation’s second-largest producer of the lightweight industrial metal gained 0.8 per cent to HK$2.48 in Monday’s trading session, compared to a 1.7 per cent decline of the Hang Seng Index.
Chalco late on Friday said in a statement to the Hong Kong Exchanges & Clearing that it has agreed to make a capital contribution to its parent Chinalco’s financial services unit Chinalco Capital.
It will do so by injecting 150 million yuan of cash and transferring its 15 per cent stake in ABC-CA Fund management – a joint venture with Agricultural Bank of China and Amundi Asset Management set up in 2008.
The stake is valued at 283 million yuan, as appraised by valuation firm ZhongHe.
Chalco and two subsidiaries have also agreed to make capital contributions to its parent’s real estate unit Chinalco Property by injecting 696 million yuan of cash and mainland properties worth 677 million yuan.
Separately, Chalco has agreed to sell 10,800 square feet of office space at the Far East Finance Centre in Admiralty to Chinalco for HK$372 million, the value appraised by Jones Lang LaSalle.