Aussie, Russian firms eye FerroChina stake -paper

HONG KONG, May 2 (Reuters) - FerroChina (FERR.SI) has attracted interest from Australia's BlueScope Steel (BSL.AX) and Russian firms including Evraz Group (HK1q.L) over selling a 20 per cent stake, the South China Morning Post reported on Friday.

The report, which did not name its source, comes after the Singapore-listed Chinese galvanised steel maker said last month it had hired Merrill Lynch as its strategic adviser.

FerroChina executive director Nelson Fong told Reuters in March that the company would consider long-term alliances or strategic investments by outside parties to secure steel coils, although he said the owners would want to retain some control.

The newspaper report said FerroChina's plans could change depending on the types of formal bids received.

"The thing to recognise is you don't know what you'll end up with," the report quoted one source as saying. "Some of the real acquisitive guys may come in with a huge bid and the whole company could get sold."

The report said Beijing had banned foreign companies from taking majority stakes in state-owned steel mills but its view on investment in the non-state sector had not been formalised. (Reporting by Jeffrey Hodgson; Editing by Anne Marie Roantree)