Liaoning Province-based Chinese steelmaker Bengang Steel Plates Co. (Bengang Steel Plates), a subsidiary of Benxi Iron and Steel (Group) Co. (Bengang Group), announced on December 3 that it plans to swap assets with its parent company Bengang Group in order to improve its financial situation, asset quality and profitability. According to the swap agreement, Bengang Steel Plates will swap its 100 percent equity in Bengang Cold-rolled Stainless Steel Dandong Co. with 75 percent equity of Bengang Posco Cold-rolling Light Plate Co. held by Bengang Group.
Bengang Cold-rolled Stainless Steel Dandong Co., founded in 2010, is still under construction. As of October 31, 2013, its total assets amounted to a value of RMB 2.364 billion ($387.5 million), with a net asset value of RMB 1.2 billion ($196.7 million).
Bengang Posco Cold-rolling Light Plate Co. was set up on June 7, 2004. Bengang Group holds a 75 percent stake in the company, while South Korean steelmaker POSCO holds a 25 percent stake. As of October 31, 2013, total assets of Bengang Posco Cold-rolling Light Plate amounted to RMB 4.84 billion ($793.4 million), with a net asset value of RMB 1.359 billion ($222.8 million). Meanwhile, in January-October of the current year, the company's operating revenue totaled RMB 6.861 billion ($1.1 billion), with a net profit of RMB 32.9352 million ($5.399 million).
Within the scope of the asset swap, Bengang Group will also pay RMB 52.0911 million ($8.54 million) to Bengang Steel Plates.
Bengang Steel Plates indicated that, after the transaction, the company will not participate in the stainless steel business, but focus on the carbon steel business with the aim of consolidating and strengthening its competitive position in the domestic market.
