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State holder suspends Baosteel stock sales

(Shenzhen Daily/Agencies)
Updated: 2005-09-23 14:33

The State shareholder of top Chinese steel mill Baoshan Iron & Steel Co. Ltd. has suspended sales of shares in the firm, as money set aside for supporting the price has run out, the listed company said Thursday.

The sales, part of a program in which the State is converting US$200 billion of company stakes into tradable stock, would not resume until April 15, Baosteel said in a statement in the Shanghai Securities News.

“As of Sept. 21, the 2 billion yuan (US$246 million) in supporting funds has already been depleted,” Baosteel said.

The money has been used to buy Baosteel stock, holding up the price to mollify public shareholders worried about the flood of government holdings coming on to the market.

Baosteel said its State parent, Baosteel Group, had previously promised to suspend sales if the price-support money ran out. Baosteel would now set aside another 2 billion yuan to be spent after Oct. 18 to support the stock if the share price fell below 4.53 yuan, the Shanghai Securities News reported.

Baosteel’s shares closed down 2.48 percent at 4.32 yuan Thursday.

Apart from the price-support fund, public shareholders were also appeased with 2.2 bonus shares for every 10 they held and warrants for buying or selling stock at set prices.

Shareholders approved the plan in August.

The State-share plans are part of an effort to whittle down government holdings in listed firms.