What’s new: Anyang Iron & Steel Group Co. Ltd., a steelmaker wholly owned by the Henan provincial government, started a government-led consolidation and registered as a new company under the name Henan Steel Group Co. Ltd.
The new company has a registered capital of 20 billion yuan ($2.89 billion). Current Anyang Iron & Steel Chairman Bo Xuebin will act as the chairman of the new entity, the company said.
The consolidation and formation of Henan Steel Group aims to bolster the core competitiveness of the central China province’s steelmakers, Henan Governor Wang Kai said at a provincial congress meeting in January.
Henan has more than 20 steel companies, most of which are smaller, privately owned plants. Neither the government nor Anyang Iron & Steel disclosed which other companies are involved in the consolidation.
The background: Anyang Iron & Steel is Henan’s largest steelmaker, with 10 million tons of annual capacity, accounting for more half of the province’s steel output and ranking 47th among global steelmakers.
For years, Anyang Iron & Steel struggled with heavy debts, high costs and weak profitability. As of Sept. 30, 2022, the company’s debt-to-assets ratio was 79.33%, compared with the industry average of 61.41%.
In the first three quarters of 2022, the company reported revenue of 29.8 billion yuan, down 21.04% from a year earlier. It reported net loss of 1.86 billion yuan.
Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bob.simison@caixin.com)
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