WISCO to merge assets into listed subsidiary

Wuhan Iron and Steel (Group) Corp, China's fourth-largest steelmaker by output, is restructuring by merging its assets and resources into WISCO's listed subsidiary, Wuhan Iron and Steel Co Ltd.

The Shanghai-listed Wuhan Iron and Steel Co outlined its plans in 15 announcements to the Shanghai Stock Exchange on March 5.

Wuhan Iron and Steel Co said it plans to raise up to 15 billion yuan ($2.4 billion) by issuing up to 4.2 billion shares.

The capital will be used primarily for the acquisition of subsidies from parent WISCO. This includes a 100 percent stake of Wuhan Iron and Steel Group Minerals Co Ltd, a 100 percent stake of WISCO International Resources Development & Investment Ltd, 90 percent of WISCO Brasil Investimentos em Metalurgia Ltda., and 100 percent of Wugang (Australia) Proprietary Limited.

Zhang Lin, an analyst with Lange Steel Information Research Center, an industrial consultancy based in Beijing, said the injection of high-quality assets such as WISCO International Resources Development & Investment into the listed Wuhan Iron and Steel Co will strengthen the steelmaker's financing capability, and ease the parent company's current capital shortage.