BEIJING, July 10 (Reuters) - China’s Jiangsu Shagang Co Ltd said on Monday it is expected to be the biggest shareholder of debt-strapped Dongbei Special Steel Group after a bankruptcy restructuring process.
Owned by the Liaoning provincial government in the country’s “rustbelt” northeast, Dongbei entered into the bankruptcy restructuring process in October aimed at recovering a reported $10 billion in debt, and said it faces “uncertainties” about paying interest on medium-term notes in April.
Jiangsu Shagang, owner of China’s largest private-owned steel mill, said one of its subsidiary is expected to become the biggest shareholder of Dongbei once the bankruptcy restructuring process is completed.
Jiangsu Shagang did not disclose further details of the investment.
Meanwhile, Bengang Steel Plates Co Ltd said on Monday it plans to invest 1.04 billion yuan ($152.88 million) in Dongbei, and this would account for 10 percent of Dongbei’s registered assets after the restructuring process.
Also owned by Liaoning provincial government, Benxi Iron & Steel Group, the parent company of Bengang Steel Plates, was reported to be part of a merger with local rival Anshan Iron and Steel. The merger has been getting postponed for years.
“The company will export enterprise management experiences to Dongbei and its subsidiaries to help them recovery soon,” said Bengang Steel Plates in the statement.
Dongbei’s restructuring plan has not been approved by the local court, and has not gone past an anti-trust investigation at the Commerce Ministry, said Bengang’s statement.
($1 = 6.8025 Chinese yuan)
Reporting by Muyu Xu and Beijing Newsroom; Editing by Sherry Jacob-Phillips