China's Anyang Steel, Shagang Group plan mixed-ownership reform
By Min Zhang and Twinnie Siu
BEIJING/HONG KONG, May 13 (Reuters) - China's Anyang Iron and Steel Group has singed a letter of intent with the country's top private steelmaker Jiangsu Shagang Group to conduct a mixed-ownership reform, in a bid to further consolidate the ferrous sector in the world's top steel producer.
In a filing to the Shanghai Stock Exchange by Anyang Steel's unit, AnYang Iron & Steel 600569.SS said Shagang intends to become the controlling shareholder of its parent group after a "market-oriented" reform.
The move comes as China calls for further concentration of the steel sector, aiming to consolidate 60-70% production in the hands of its top 10 steelmakers by 2025 from less than 40% now.
The central China-based Anyang Steel is currently backed by the state assets regulator of Henan province. It has an annual steel production capacity of around 10 million tonnes.
Meanwhile, Shagang Group, which ranked the sixth biggest steelmaker in the world in 2019, according to World Steel Association, is able to produce over 40 million tonnes of steel per year.
China produced 1.065 billion tonnes of crude steel in 2020.
"Details of the reform and whether Shagang Group will participant eventually still face uncertainties," according to the filing.
Shagang did not immediately comment.
The company had said in November that it would invest 14.8 billion yuan in buying up and modernising steel mills in Henan.
AnYang Iron & Steel's share price closed at 4.06 yuan on Thursday, while Shagang's listed arm Jiangsu Shagang 002075.SZ ended at 9.51 yuan per share.
(Reporting by Min Zhang and Twinnie Siu Editing by David Goodman and David Evans)
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