Panzhihua Steel says to stick to merger plan
SHANGHAI, Aug 5 (Reuters) - The Panzhihua steel group, one of western China's top steel makers, will not change its previously announced merger plan, the group's three listed units said on Tuesday after negative rumours about the plan caused their shares to plunge.
"Panzhihua has no plans to adjust its major restructuring scheme," PZH Steel (000629.SZ), Chongqing Titanium 000515.SZ and Sichuan Changcheng Special Steel 000569.SZ said in brief statements to the Shenzhen Stock Exchange.
Shares in the three companies were suspended on Monday after they plunged well below the prices at which the firms plan to conduct share placements and share swaps in a 7.19 billion yuan ($1.1 billion) deal that was announced in May.
The exchange said the shares would resume trading at 0230 GMT on Tuesday.
The official China Securities Journal said on Monday that the shares were hit by speculation that weakness of the overall stock market might derail the merger, that the deal might not obtain final approval from the securities regulator, and that other steel makers might seek to buy some of the assets involved.
The companies said on Tuesday that market speculation about possible changes to the merger plan was incorrect, although they did not discuss the speculation in detail.
The Panzhihua group plans to merge all its assets into PZH Steel in a deal that would more than double PZH Steel's total assets and create a listed company with 37.5 billion yuan in annual sales and 1.69 billion yuan of net profit. ($1 = 6.85 yuan) (Reporting by Samuel Shen; Editing by Andrew Torchia)
