According to Caixin, it has been suspended for more than four months of SGIS Songshan Co. resumption today (June 13). The company previously announced proposed a major reorganization of assets have been terminated, and promised immediate effect no longer planning a major reorganization of assets within six months.
* ST Shaogang originally intended to sell all the steel business assets, the actual controller for the company’s buyers Baosteel Group Co., Ltd., at the same time, * ST Shaoguan Iron & Steel Baosteel Group will acquire the business assets of financial subsidiaries issued shares by way of purchase of assets, purpose is to release a serious loss of primary iron and steel industry, and replaced with financial assets business, to keep the listed company “shell.”
* ST Shaogang but ultimately abandoned the restructuring. Notice that its main reason is two-fold: on the one hand, to be placed assets of Baosteel Group’s financial business assets, and require a complex approval procedures, involves not only the state-owned assets supervision and administration, finance and securities industry authorities, further information disclosure of listed companies involved in convergence, the parties are unable to complete the restructuring within the expected time; on the other hand, related to divestitures and restructuring will be required to pay the cost of large-scale tax.
SGIS Guangdong Province is the largest steel producer, leading products for the sheet, wire rod and three series, the steel output of about 600 tons. The company formerly Shaoguan Steel Group Holdings, in December 2011, Shaoguan Iron & Steel Group by the SASAC approval, incorporated into Baosteel Group, Shaoguan Iron & Steel Group in September the following year changed its name to Guangdong Shaoguan Iron & Steel Co., Baosteel Group. Baosteel Group became SGIS actual controller.
Then why take the “free transfer” approach, mainly due SGIS years of operation is not ideal. From the net profit, the loss in 2008 of $ 1.6 billion in 2009 and 2010. Although there is no loss, but net profit was only 093 million yuan and 021 million yuan, followed by two years in 2011 and 2012 and then another loss of 1.138 billion yuan and 19.5 billion yuan.
According to the provisions of the Shenzhen Stock Exchange in 2013 SGIS had worn a “ST” hat. After the company was officially transferred to Baosteel Group, 2013 was only 100 million yuan profit obtained in 2014 and 2015, its net profit loss of 1.388 billion yuan and 2.596 billion yuan, of which 2015 losses record company history. SGIS referred thereby “Phi Star hats”, become “* ST Shaogang.”
April 30 this year, * ST Shaogang a quarterly report published in 2016, a loss of 230 million yuan. SGIS original restructuring plan is to be a serious loss of the main steel business sold to Baosteel Group, Baosteel Group, and then based on their assessment completely turn off the part of the production capacity, but that abortion restructuring plan, SGIS future woeful.
February 4, the State Council issued “on the steel industry to resolve the overcapacity in the development of the views of a turnaround,” clearly with 5 years Yajian crude steel production capacity of 100 million -1.5 million tons, overall responsibility by the SASAC and the provincial government Yajian implementation. Currently the provinces have reported to the task Yajian NDRC and the Ministry of Industry, capacity Yajian work will be fully carried out.
SGIS severe losses, on the one hand will face pressure to cut energy pressure, on the other hand, if 2016 is still a loss, will be forced to withdraw from the market.
related news
* ST asset restructuring Shaogang halt Baosteel asset securitization how to proceed?
An analyst Northeast Securities to CBN reporter said SGIS consecutive years of losses, there is need to protect the shell, the injection of assets to be losses. Baosteel Group has financial assets “Warburg system”, by the loss of high-quality financial assets into the listed subsidiary, both security shell, while at the same realization twelve arbitrage. And for SGIS said in a statement that the main reason for the termination of the reorganization of assets into account the complexity of the related financial divestitures and reorganization proceedings, said analysts believe, has been the securitization of financial assets are strictly regulated objects. The recently passed its assets into the listed subsidiary of state-owned enterprises to enhance the Group’s asset securitization rate case of a few, in addition to asset restructuring * ST Jinrui before and between Minmetals, * ST Jinan Diesel also released yesterday evening, said progress in the suspension, Note CNPC intends to eligible financial assets.
“SGIS asset restructuring both clear asset securitization SOE reform is inevitable, but also a focus on this regulation, in fact, considered more of a state-owned how to locate the problem, each of the current state-owned enterprises have become a platform for pluralistic how to take into account the development of the back of the main business, which is the regulatory authorities to be considered, but also its asset restructuring may meet resistance reasons, “Huatai Securities chief strategist Xuehe Xiang said.
Under the “major asset restructuring of listed companies management approach” and other laws, regulations and normative documents, SGIS commitment within six months no longer planning a major reorganization of assets from the date of resumption of trading. This also means that during the year, will not be completed SGIS financial assets into Baosteel Group, Baosteel Group as a whole so as to enhance the work of asset securitization rate.
* ST Bayi Steel (hereinafter referred to as “Bayi Iron & Steel”) as a subsidiary of Baosteel Group, Paul Shell also face pressure, but also because it is a major asset restructuring suspended state. Bayi Iron & Steel latest bulletin released on June 4, the company stock since June 1, 2016 to continue the suspension is not more than one month. In the latest announcement, Bayi Iron & Steel said that “a major asset restructuring framework agreement of Xinjiang Bayi Iron & Steel Co., Ltd.” is only a preliminary intention of the parties to the restructuring framework, not a final restructuring plan. Company and the parties concerned are currently the subject matter of the restructuring plan and the assets involved in the in-depth consultations, to explore, to further improve the restructuring plan.
This is before the market analysts speculate under the relevant industrial gases business assets will be injected into the Baosteel Group Bayi Iron & Steel messages vary. The June 3 SGIS announcement had been suspended and there is no mention of issues.
By 2015, China’s steel industry overcapacity, imbalance between supply and demand, under the background of the expansion of the industry loss, Bayi Iron & Steel 2015 report, the company in 2015 from January to December achieved operating income of 10.555 billion yuan, down 48.85 percent. The company SGIS 2015 annual report, the reporting period the company achieved operating income of 11.145 billion yuan, down 42.84 percent; operating cost of 12.525 billion yuan, down 36.53%; net profit attributable to the parent company of one hundred million yuan -25.96, 2014 in the same period -13.88 million. By injecting quality assets to realize losses, it is the most realistic solution SGIS and placed in front of Bayi Iron & Steel.
CBN reporter interviewed a number of companies, including SGIS the phone has been in no one answered, Baosteel has said the inconvenience to do in response. (Sina Finance)