Chalco Extends Bid for SouthGobi Stake
Aluminum Corp of China Ltd (NYSE: ACH, SHA: 601600, HKG: 2600) will get an extra month to make its $920 million offer for a possible 60% stake in Canada-based, Mongolia-focused SouthGobi Resources Ltd (HKG: 1878) from Ivanhoe Mine Ltd (NYSE: IVN) despite challenges posed by new foreign ownership restrictions in Mongolia, the Wall Street Journal reported. Mongolia adopted a new law on foreign investment that limits foreign ownership in strategic industries such as mining to 49%, unless the buyer obtains parliamentary approval. That move came shortly after Aluminum Corp of China, or Chalco, first announced its plan to purchase the stake in SouthGobi, which produces coking and thermal coals. Chalco and Ivanhoe said they would cooperate with the Mongolian government to ensure the deal complies with the country's new foreign investment law.
Li Ning to Undergo Transformation
Li Ning Co (HKG: 2331), China's largest sports apparel retailer, said it will replace its chief executive with founder Li Ning, and elevate a top executive from US buyout firm TPG Group to drive changes as part of a three-year transformation program aimed at improving profitability, the Wall Street Journal reported. The plan comes as its profit fell 65% last year due to rising costs and slowing economic growth in China. It also faces increasing competition as domestic and foreign sports brands seek greater local presence.
Vanke 1H Contract Value Down Despite Higher Sales Volume
China Vanke Co (SHE: 000002), the nation's biggest property developer by revenue, said it sold 6.03 million m2 in floor space fetching ¥62.54 billion in 1H 2012, up 6.5% and down 4.7% respectively from 1H 2011. Chinese developers have been cutting prices to attract buyers amid a slack property market suppressed by government policies.
Baosteel to Cut 30% Production in 5 Years
Baosteel Group Corp, the parent of Baoshan Iron & Steel Co (SHA: 600019), China's most profitable mill, said it will cut 5.8 million tons of iron output and 6.6 million tons of steel output in the next five years. The combined amounts make up 30% of Baosteel's total capacity. The move comes as the company optimizes its product lineup and the Shanghai government shuts down more factories to move up the economic value chain.
Sany Quells Massive Layoff Rumor
Sany Heavy Industry Co (SHA: 600031), China's largest construction equipment manufacturer, said it is not in danger of serious downsizing, in response to a Sany technician who was quoted as saying that 30% of the workforce were quitting. A Sany spokesman admitted to some resignations but stressed they were normal personnel turnover.
Swellfun Sells Liquor in Britain
Sichuan Swellfun Co (SHA: 600779), a Chinese liquor distiller, has offered its baijiu, or white liquor, in Britain, priced close to 100 pounds, to attract rich Chinese there, said Diageo PLC (NYSE: DEO), which last year purchased a majority stake in Swellfun. Britain is Swellfun's first step in the European market. Demand for white liquor, a strong Chinese spirit, has been growing fast outside of China as westerners step up socializing with rich Chinese living or doing business overseas.
Beijing Jingkelong to Offer ¥200m Bonds
Beijing Jingkelong Co (HKG: 0814), a retailer, said it will issue ¥200 million worth of one-year bonds on July 10, without disclosing the purpose. The company posted ¥9.18 billion in revenues and ¥273 million in net profits last year.
$1 = ¥6.32