The Chinese steel trader and producer Delong Holdings Ltd, which is subject to a takeover bid from Russia's Evraz Group, expects to report losses for 2008.
In an announcement today Delong attributed the losses to a drop in steel prices in the Chinese market in the second half of the year.
The company has cut output by 30% since October in a bid to reduce losses as demand for steel has fallen, although it said it still has enough resources to fund its operations. In addition, Delong said that on Jan. 5 it re-started two of the four blast furnaces that closed operations in October as demand for steel has started to recover.
Delong expects to publish its financial results for 2008 by February 28th. At present, Evraz, which owns a 10% stake in Delong, is waiting for the necessary regulatory approvals from the Chinese authorities to acquire a controlling stake in the company. Best Decade Holdings Ltd., the core shareholder of Delong, has agreed to extend the deadline until February 18th for Evraz to complete the takeover.
Source: Steel Guru
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