China's Angang boosts stakes in Panzhihua units
SHANGHAI, Sept 10 (Reuters) - China's Anshan Iron and Steel Group (Angang) has spent nearly 1.6 billion yuan ($234 million) to raise its stake in the Panzhihua steel group's listed firms to 10 percent from 5.1 percent, bolstering Panzhihua's consolidation plan, the official Shanghai Securities News said on Wednesday.
The purchases, between Aug. 18 and Sept. 9, followed Angang's Aug. 15 announcement that it had paid about 1.7 billion yuan for a 5.1 percent stake in each of the three companies, and brought its total investment to 3.3 billion yuan.
The three listed companies of the Panzhihua steel group, one of western China's top steel makers, had said last month that they would not alter a previously announced plan to merge the group's operations into a single listed company, after rumours casting doubts on the plan had sent their shares plunging.
Shares in the three companies -- PZH Steel (000629.SZ), Chongqing Titanium 000515.SZ and Sichuan Changcheng Special Steel 000569.SZ -- have fallen below the prices at which the firms plan to conduct share placements and share swaps in a 7.19 billion yuan deal announced in May.
Under the plan, Angang, China's fifth-largest steelmaker, has the right to buy shares of the three listed units from shareholders who want to sell instead of swapping into the merged firm, at prices above the firms' current market prices.
Beijing is encouraging mergers and acquisitions in China's steel industry, the world's largest, to create globally competitive giants, but analysts have said it faces obstacles from local governments keen to protect sources of employment and tax revenue.
Shares of the Panzhihua units rose in early trade on Wednesday, with PZH Steel up 3.5 percent at 7.95 yuan, Chongqing Titanium up 2.2 percent at 11.42 yuan and Sichuan Changcheng up 3.3 percent at 5.32 yuan, all outperforming China's benchmark Shanghai Composite Index .SSEC, which fell 1.3 percent. ($1=6.838 Yuan) (Reporting by Samuel Shen; Editing by Edmund Klamann)
