Regulator Approves $1.84 Billion Boost for Chalco as Aluminum Industry Woes Continue
Regulators gave the green light for metals giant Aluminum Corp. of China Ltd. (Chalco) to sell shares to a range of state-run investors as it looks to inject funds while the aluminum industry continues through a rocky patch.
The listed company, whose main shareholder is state-owned behemoth Aluminum Corp. of China (Chinalco), said that the China Securities Regulatory Commission (CSRC) had approved plans to issue shares with underlying asset value of 12.7 billion yuan ($1.84 billion), according to a filing (link in Chinese) with the Shanghai Stock Exchange.
The shares will allow eight companies led by Huarong Ruitong (a unit of the country’s distressed debt manager China Huarong Asset Management Co.), as well as China Life Insurance and ICBC Financial Investment Co. to take stakes in Chinalco subsidiaries Baotou Aluminum Co. Ltd., (25.67%), Shandong Aluminum Industry Co. (30.8%) China Aluminum Industry Co., Ltd. Zhongzhou branch (36.9%) and Chinalco Mining Corp. International (81.14%).
The aluminum industry has been facing tough conditions, with an overabundance of supply and falling demand, while China’s domestic industry faces substantial pressure from tougher environmental regulations and rising pressure to cut excess capacity. Aluminum futures are down 14% for the year so far on the Shanghai Futures Exchange. The China Nonferrous Metals Industry Association, an industry body, has called a meeting of the biggest producers for Friday to discuss the dire state of the market, Reuters reported.
Both Chalco and Chinalco remain profitable, with Chalco reporting net income of 640.9 million yuan in the third quarter of this year, up 6.8% year-on-year. However, both the state-owned entity and Chalco are feeling the strain of a difficult market. “We’re not very optimistic,” Chinalco’s deputy general manager Ao Hong, said last month. “We’re under huge pressure, so the company has to accelerate reform and cut costs internally.”
Analysts expect Chalco to continue to receive high level support from the government, despite being a listed company.
Contact reporter David Kirton (email@example.com)
May 21 19:59
May 21 17:50
May 21 17:13
May 21 17:46
May 21 15:04
May 21 14:38
May 21 14:30
- 1Opinion: Jack Ma’s ‘669’ Sex Joke Reinforces Tech’s Culture of Gender Harassment
- 2Jack Ma Faces Backlash for Telling Employees How Often to Have Sex
- 3China Boosts Hydrogen Fuel Cell Investment in Green Energy Push
- 4Huawei to Seek Remedies in Face of U.S. Ban
- 5Huawei Prepares ‘Alternative Chips’ to Cope With U.S. Ban
- 1Power To The People: Pintec Serves A Booming Consumer Class
- 2Largest hotel group in Europe accepts UnionPay
- 3UnionPay mobile QuickPass debuts in Hong Kong
- 4UnionPay International launches premium catering privilege U Dining Collection
- 5UnionPay International’s U Plan has covered over 1600 stores overseas