Huaxin halts trading, mulls foreign proposal
According to China Knowledge Press, Huaxin Cement Company Limited is reportedly considering an investment offer from an overseas company and has stopped stock trading temporarily.
The Huangshi-based manufacturer, with market capitalisation of US$1.06bn, counts Swiss cement maker Holcim as its largest stakeholder at 26.1 per cent share. As the world’s second-largest cement producer, Holcim has branches in over 70 countries and reported sales of 23 billion Swiss Francs in 2006. Last year, Huaxin won a US$20m contract to supply 2Mt of cement to Holcim.Holcim’s chief financial officer Theophil Schlatter said last year that the company is keen to raise its shareholding from 26 to 50.3 per cent for US$125m, which is presently pending regulatory approval. The company was earlier reported to be keen in acquiring Indian cement giant Digvijay Cement, but decided not to proceed with the plan.
Incidentally, Bruno Lafont, chief executive of the world’s largest cement producer Lafarge SA, announced plans of a US$600m expansion by its Chinese subsidiary Lafarge Shui On during mid-week, targeting to raise Yunnan’s capacity by about 40 per cent to reach 50Mt in 2012, according to sources. It was reported that the expansion would cover additional cement-making capacity, building new plasterboard and concrete plants and developing aggregate quarries.
Meanwhile, Huaxin Cement Co Ltd said its board has approved a revision in the pricing of new shares to be issued to Holchin BV, a wholly-owned unit of Switzerland’s Holcim.
On March 7, 2006, Huaxin announced plans to issue 160m A-shares to Holchin BV, making Holchin its largest shareholder. The price was set at no less than 90 pct of the average stock price in the 20 trading days prior to the announcement. The company’s stock price closed at 5.82 yuan the day after the announcement.
In a statement filed with the Shanghai Stock Exchange today, the company said regulatory agencies have questioned the process of arriving at the 2006 price. The new price will be based on the same criteria but will incorporate more recent market prices.
A-shares of Huaxin Cement closed up 4.97 pct at 30.44 yuan last Friday. The new proposal will be reviewed by its shareholders and the securities regulator, the company said.
(1 usd = 7.39 yuan)
Published under Cement News
