Shandong Province-based Chinese steelmaker Shandong Iron and Steel Co. (Shandong Steel) announced on November 26 that it plans to sell its 80 percent stake in Jinan Steel International Trade Co. (Jigang International Trade) and its 100 percent stake in Shandong Laiwu Steel International Co. (Laiwu Steel International) to Shandong Steel International Trade Co. (Shandong Steel International Trade). Shandong Steel and Shandong Steel International Trade are both subsidiaries of Shandong Iron and Steel Group.
In 2012, Jigang International Trade registered a net loss of RMB 2.892 million ($474,098), while it realized a net profit of RMB 236,800 ($38,820) in January-September this year. Shandong Steel's 80 percent stake in the company is worth RMB 88 million ($14 million).
Meanwhile, Laiwu Steel International recorded a net profit of RMB 28.436 million ($4.662 million) in 2012, while it realized a net profit of RMB 109 million ($17.9 million) in January-September this year. The company is valued at RMB 496 million ($81 million).
According to its financial report for the first three quarters this year, Shandong Steel registered a net loss of RMB 128 million ($21 million) in January-September this year. The sale of the two assets in question for a combined value of RMB 584 million ($96 million) would improve Shandong Steel's profit situation for the current year.
