Baosteel Group Finance Co., Ltd., a holding subsidiary of state-owned Baosteel, proposed to absorb the WISCO Finance Co., Ltd, a subsidiary of Wuhan Iron and Steel (Group) Corporation Group, Baosteel said in an announcement late September 23.
After the merger, Baosteel Finance will take over assets, liabilities, businesses and personnel previously owned by WISCO Finance.
In 2017, China Baowu set a target to increase its steel production capacity from 70 million tonnes per annum (Mtpa) (the capacity after the merger with Wuhan Iron and Steel in 2016) to 100 Mtpa by 2021.
The company achieved the best performance in 2018 since its merger. However, its performance fell sharply in the first quarter of 2019 with revenue down 3.1% year on year to 65.3 billion yuan ($9.18 billion) and net profit tumbling 45% to 2.7 billion yuan.
In order to boost company income, Baosteel has formulated a plan to adjust the overall layout of its domestic steel bases.
It plans to gradually move out of steel smelting capacity in Nanjing, capital of Jiangsu province, before the end of 2028, and at the same time build a new steel project in Yancheng, also in the province.
The steel major would pour 50 billion yuan to build the first phase of the Yancheng project, which is expected to be completed by 2021.
Baosteel also set schedule for expanding its possession in overseas market. By the end of 2018, Baosteel had 25 overseas subsidiaries and seven shareholding companies, distributed in the United States, Japan and Germany, involving trade, shipping and processing business.
Baosteel's overseas assets are presently at 20.8 billion yuan, accounting for about 6% of total assets.
(Writing by Alex Guo Editing by Harry Huo)
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