shougang concord gets usd 320 million for expa

March 06,2008

Shougang Concord gets USD 320 million for expansions

It is reported that the Hong Kong listed arm of the mainland's sixth largest steelmaker Shougang Concord has secured a USD 320 million loan to finance its acquisitions and expansion plans.

The four year loan was granted by five banks Bank of China, Fubon, China Construction Bank's Hong Kong branch, CITIC Ka Wah Bank and Agricultural Bank of China's Hong Kong branch. The loan adds to the CNY 3.3 billion that Shougang Concord already has in hand.

As per report securing the loan is seen as a move to help the steelmaker bankroll its two latest acquisitions totaling more than USD 400 million as well as future acquisitions. The arm spent USD 26 million on a 6.4% stake in the Australian-listed Australasian Resources a year ago.

In January 2008 Shougang Concord reached an agreement to buy 156.8 million shares representing a 19.73% stake in Australian iron ore miner Mount Gilbson from Russia's Metalloinvest for USD 381 million. The deal is still being reviewed by Australian regulators.

Mr Michael Chen deputy managing director of Shougang Concord said prices of iron ore have jumped 65 percent so far this year. He said Prices of steel plates have doubled so far this year to USD 1,200 per tonne. The price will further increase in the second quarter. He added that "The demand of steel plates is huge on the mainland and China is on track to replace South Korea as the world's largest shipbuilder.”