3.0 Steel LAIWU Steel reorganization plan released

Due to the planning of the new reorganization of the two-month suspension of Jinan Steel (600022), Laiwu Steel Shares (600102) launched a third version of the reorganization plan. The new restructuring has not changed the two previous plans to take Jinan iron and steel as a platform to absorb shares of Laiwu steel, the targeted additional acquisition of assets of the programme framework. But the new plan made a major adjustment to the key factors that left investors voting in the last vote, and all shareholders, rather than the dissenting shareholders who were asked for the last time, could exercise cash options.　　The adjustment will allow the restructuring to evade the risks of future market volatility to the restructuring, or to win more shareholder votes in favour of the restructuring.　　The two companies will double the shares on April 13, but not immediately to convene a general meeting of shareholders to consider the reorganization plan, the company will be based on the relevant content of the Board to carry out the corresponding preparations, the convening of the provisional general Meeting of the relevant issues will be announced. The share exchange rate remains unchanged the announcement shows that the new restructuring programme has not fundamentally changed from the framework to the previous two programmes. The main content of the program is to Jinan iron and steel as the main body, Exchange shares to absorb the merger of Laiwu Steel. But according to the two-tier market prices to redefine the share price, Jinan steel for 3.44 yuan/share, Laiwu Steel shares of 7.18 yuan/share.　　Although in accordance with the price of the lock, Laiwu steel shares compared to Jinan iron and steel stock exchange ratio is only 1:2.09, but still give a certain risk premium to LAIWU Steel shareholders, the share rate is still 1:2.43, with the last consistent. On the other hand, Jinan steel to Jigang Group Co., Ltd. and Laiwu Iron and Steel Group Co., Ltd. issued shares to buy its remaining main assets, the surviving listed company Jinan Steel renamed to Shandong Iron and Steel Co.　　The estimated value of the proposed asset is $3.76 billion, slightly lower than the last estimate of $3.8 billion, and the number of shares to be issued is 1.093 billion per cent according to the new set price of 3.44 yuan/share.　　In the new restructuring plan, Yinshan steel and mechanism companies are still not included in the scope of injection, Mountain Steel group commitment to improve the relevant formalities in the Yinshan section of the 2 years will be the entire stake in the Yinshan steel injection into the listed companies, before the injection to the listed companies entrusted. Rizhao Iron and Steel stake is also the focus of market attention. The announcement showed no significant progress has been made in the acquisition.　　Shan Steel Group has signed an asset reorganization and cooperation framework agreement with Rizhao Steel, a one-time acquisition of Rizhao Iron and Steel Holding Group Co., Ltd. and Rizhao Steel Rolling Co., Ltd. and related assets, but is still in the commercial negotiation stage, only signed the framework of the acquisition agreement, whether the acquisition of success there are certain uncertainties.　　Shan Steel Group also pledged to complete the acquisition and restructuring of Rizhao steel shares and assets, and in accordance with the national iron and steel industry policy on its optimal adjustment to upgrade the completion of the 2 years of its holding of all the sunshine Steel equity and asset rights into the listed companies. The biggest highlight of the new scheme is the adjustment of the right of cash choice. The new plan stipulates that the state-owned assets Investment Holding Limited in Shandong ProvinceDivision and Shan Steel Group will be to Jinan iron and steel and Laiwu Steel Group and its affiliated enterprises in addition to all the shareholders to provide the right to purchase claims, cash options.　　Under the new scheme, all shareholders, except the Shan Gang and affiliated enterprises, whether to vote "aye" or "against", or not to vote in the reorganization plan, may exercise all or part of the cash option and the right to acquire the claim. The right to cash options was covered in the first two programmes. But this mechanism, which protects small and medium-sized investors, has been the main culprit in the previous two programmes. The root of this is that in the system design, the first two have clearly stipulated that only the dissenting shareholders, that is, the reorganization of the plan to vote against the shareholders to exercise the right to choose cash. And when the market price in the event of sharp fluctuations, especially the stock price falls to the cash option prices below, the formation of risk-free arbitrage, investors can cast a negative vote to obtain cash options to earn the difference, to some extent, increased the enthusiasm of investors vote, and the reorganization of the plan cast a negative vote.　　At the last shareholder meeting, the shares had been significantly below the cash-option price, leading about 40% per cent of the community's public shareholders to vote in the programme and eventually to lose the restructuring plan. The cash option price has also been lowered according to market value.　　In the last reorganization plan, Laiwu Iron and steel shareholders have the right to choose the price of the cash option of 8.9 yuan/share, this time for 7.18 yuan/share; Similarly, Jinan Steel's cash options are also reduced from 3.95 yuan/share to 3.44 yuan/share. Analysis of the industry, the recent two-tier market strong characteristics relatively obvious, as a cyclical industry is ushered in the process of value revaluation, steel plate two market trend is strong, as has been suspended for nearly two months of Jinan steel and Laiwu steel shares, short-term replenishment of the probability is great.　　The collapse in share prices may not be repeated after the last reorganization package was announced. The recovery of the iron and steel industry, but also conducive to Jinan steel and Laiwu Steel shares out of the trough, after the completion of the restructuring profitability is expected to be further enhanced.　　According to the Jinan iron and steel test combined earnings forecast statement and notes, 2011 test Preparation Company attributable to the owner of the parent company net profit of 580.8107 million yuan. The reorganization of steel and Laiwu steel in Jinan is an orderly move to restructure the overall layout of Shandong Iron and steel industry. According to the introduction, as the State Council clearly defined the country's only steel industry restructuring pilot province, Shandong Iron and steel industry adjustment as a breakthrough in the restructuring of the province, in accordance with asset restructuring, elimination of backwardness, optimize the layout, improve the level of work, vitalize, explore the steel industry structure, transfer mode of the relevant　　Development ideas and innovative models. Cai Changping, Jinan Iron and Steel chairman, said in an interview with China Securities News reporter, Shandong Iron and steel industry restructuring is the national steel industry restructuring of the inevitable choice, after the reorganization of Shandong province, about 80% of the steel production capacity will be concentrated to Shandong Iron and Steel Group, Jinan Steel and Laiwu Steel after the reorganization of the surviving listed companies as the only steel industry group of the listed companies, will get moreBig development space.　　According to the requirements of Shandong Iron and steel industry planning, after the completion of the integration of Jigang, Laiwu steel, gradually reduce the capacity of the mainland and new capacity to coastal layout, to 2020 Shandong province to achieve an annual output of 40 million tons of steel, of which Linhai base annual output of more than 60%.　　But the integration and reorganization of Jinan steel and Laiwu steel shares is not smooth, the first plan of Jinan iron and steel exchange to absorb the shares of Laiwu Steel due to major changes in the market environment and share prices fell sharply, failed to submit to the shareholders will be considered and after the abortion, the second end of last year, because of the According to the introduction, although the capital level of integration has repeatedly been frustrated, but the integration of the entity level has been advancing. According to the introduction, Jinan iron and steel after shutting down early last year two 350 cubic meters of blast furnace, and arrangements for a 1750-meter cubic blast furnace production, the end of this year also to eliminate 4 350 cubic meters of blast furnace, an annual output of more than 1.8 million tons of iron, a total of 3.5 million tons of production capacity. Laiwu Steel gradually compressed 11 million tons of capacity to 6 million tons. Shandong Iron and Steel Group in the successful formation of the group, has set up a capital center, procurement Center, Sales center and operation of the Coordination center, the initial establishment of a unified operating platform. Through a series of substantial reorganization measures, Shandong Iron and Steel group's large-scale, intensive management advantages are beginning to appear, Shandong Iron and Steel Group has previously been expected, the resource integration can produce more than 1 billion yuan per year of integration benefits. Responsible Editor: NF045