Chalco to bid for parent's stakes in subsidiaries
Updated: 2008-02-27 09:19
Aluminum Corp of China Ltd, or Chalco, is vying to buy 4.175 billion yuan worth of equity stakes in six sister firms from its parent Chinalco, in a move to consolidate the nation's aluminum processing industry.
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"We have high interest in buying the stakes of the six sister companies that Chinalco is selling through Beijing Equity Exchange," Zhang Qing, manager with Chalco's Secretariat of the Board, told China Daily yesterday.
"But we need to get approval from the board of directors to participate in the bidding, and asset transfers take time to complete the legal procedures," Zhang said.
The six bidding targets Chinalco is selling include: 100 percent stakes of its two wholly owned unit: Lanzhou Liancheng Longxing Aluminum Co and Chinalco-SWA Cold Rolling Strip Co, as well as 56.86 percent stakes in Hua Xi Aluminum Co, 60 percent stakes in Chinalco-SWA Plates & Strips Co, 84.02 percent of Chinalco Henan Aluminum Fabrication Co and 75 percent in Chinalco Ruimin Co, according to the company's statement on Beijing Equity Exchange's website.
Chinalco also said in the statement that the bidders must be State-owned enterprises operating alumina and aluminum production and must have at least 50 billion yuan in net assets. Listed firms will be preferred in the bidding.
Chalco said last April in its A-share listing prospectus that it plans to acquire Lanzhou Liancheng Aluminum, based in Northwest China's Gansu province, from its parent company Chinalco after floating shares in Shanghai.
Chalco fell 0.3 percent to HK$15.14 in Hong Kong yesterday while gaining 0.8 percent to close at 31.18 yuan in Shanghai.
"Chalco's leadership role is positive in the process of consolidating China's aluminum producers, which will largely improve the industry's capacity utilization and reduce fragmentation," said Danny Chen, of Fitch Ratings, in a research note.
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