The Agreement on Bayi Steel Reorganization by Baosteel Officially Signed

Wang Lequan Points out that It is a Far-Sighted Strategic Measure for Complementary Advantages
Bayi Steel Reorganization by Baosteel was settled. At 19:00 of 16th January, the signing ceremony of the Agreement on Additional Share and Reorganization of Bayi Iron & Steel Group by Baosteel Group Corporation and the People's Government of Xinjiang Uigur Autonomous Region was held in Urumchi Xinjiang.

Mr. Wang Lequan, member of the Political Bureau of the Central Committee of the CPC, secretary of the Party Committee of Xinjiang Uigur Autonomous Region, attended the signing ceremony and made an important speech. The ceremony was moderated by Ismail Tiliwaldi, deputy secretary of the Party Committee and chairman of the Autonomous Region.

Present at the ceremony are: the leaders of the Party and the government of the autonomous region such as Ailigeng Yiminbahai, Fu Qiang, Chen Lei, Han Yong, Song Airong and Dai Gongxing, the leaders of the SASAC of the autonomous region Wang Jiwen, etc., Baosteel leaders Xie Qihua, Xu Lejiang, Liu Guosheng, Ai Baojun, Ouyang Yingpeng, Zhao Kun, Zhao Zhouli, Wang Jinde, etc.

, Bayi Steel Leaders Zhao Xia, Chen Zhongkuan, etc. and leaders of Industrial & Commercial Bank of China Li Xiaopeng, etc. Baosteel Group Chairman Xu Lejiang and Ailigeng Yiminbahai, member of the Standing Committee of the Party Committee & vice chairman of autonomous region, signed the Reorganization Agreement.

Located on the shore of East China Sea, with top grade plates as dominant products, Baosteel is the largest and the most modern super large steel maker in China, ranking No. 296 among the global top 500, possessing management experiences for modern steel makers and advanced production equipment and technologies.

Bayi Steel at the foot of Tianshan Mountain is the largest steel complex of Xinjiang Autonomous Region, with distinct regional, resource and market advantages and enormous development potentials. During "11th five-year plan" period, Bayi Steel will achieve over 6 million ton production capacity, and both the product mix and enterprise strength will reach a new level.

According to the Agreement, the Government and the SASAC of the Autonomous Region will make the financial contribution with the right to the use of the land estimated to worth about RMB 330 million as additional share in Bayi Steel. Baosteel will contribute RMB 3 billion to Bayi Steel and will be the holding party with 69.61% stock ownership. Xinjiang SASAC will hold 15% stock ownership. During the process of the assets reorganization, Bayi Steel will strengthen the work of stripping the principal business from the auxiliary ones under the leadership of the SASAC of the autonomous region.

Xie Qihua, chairwoman of CISA and former president of the BOD of Baosteel Group said in the signing ceremony that the assets reorganization of Bayi Steel performed by Baosteel symbolized the significant progress of multi-regional assets reorganization for Chinese steel makers. It accords with the demand of Bayi Steel's future development plan and is favorable for Baosteel to further optimize the industrial & market arrangement, as well as being advantageous for both parties to bring into play the synergetic effect in resource development and construction of major projects.

Xie expressed that after the assets reorganization, Baosteel will effectively fulfill the commitment of integrating Bayi Steel into Baosteel's overall development plan to complete adjustment of Bayi Steel's product mix as soon as possible; and at the same time introduce advanced technology and management to Bayi Steel to enable it to master plate production technology as soon as possible to further promote its market competitiveness.

Zhao Xia, chairman and Party Committee secretary of Bayi Group, expressed in the signing ceremony that from that day on Bayi Steel would become, from a regional steel maker, a unit of development of Baosteel, the largest steel maker of China and would open a brand new page of the development of Bayi Steel, which was firmly supported by the cadres and employees of Bayi Steel.

After the reorganization, Bayi Steel shall focus on the following works: a) deepening enterprise reformation to actively and steadily fulfill stripping the principal business from the auxiliary ones, b) speeding up enterprise development and construct the planned projects fast and well, and c) strengthening management to get integrated into Baosteel's advanced management to become more competitive in the market.

Wang Lequan made an important speech at the ceremony saying that Bayi Steel reorganization by Baosteel is a significant event attracting the attention of domestic iron & steel industry, as well as one that the Party Committee and the People's Government of Xinjiang Autonomous Region are paying great attention and giving full support to. It is in conformity with the developing trend of global iron & steel industry. It is not only a concrete action of implementing the Policies on the Development of Iron & Steel Industry of the state but also an example of multiregional cooperation between eastern and western enterprises in which the eastern economy gives impetus to the economic development of Xinjiang. Bayi Steel reorganization by Baosteel is an insightful strategic measure for complementary advantages and with broad outlook. The Party Committee and the people's government of the Autonomous Region will continue to give full support to works of the reorganized enterprise and will do their best to create good environment and conditions for them.