Chongqing Iron & Steel Co Ltd plans to take over relocated assets of Chongqing Iron and Steel (Group) Co Ltd. by a private placement, paying cash and undertaking debts. The deal reaches nearly CNY 17 billion, being equivalent to five times of net assets of the company.
A restructuring program indicates that target assets are appraised at CNY 19.63 billion. The group will take over around CNY 2.70 billion assets impairment losses of the company's old plant. Therefore, the company needs to pay CNY 16.94 billion to the group for the acquisition.
The company will sell additional 1.996 billion new shares at CNY 3.14 each to the group to raise funds as it is unable to pay the huge consideration in terms of its current capital strength.