Yuntianhua Group Adjusts Restructuring Plan for Three Listing Arms
Year:2009 ISSUE:33
Click:344    DateTime:Nov.25,2009
Yuntianhua Group Adjusts Restructuring Plan for Three Listing Arms     

Yunnan Yuntianhua Group is forced to change its regrouping plan, originally announced in last November for its three listed arms because the financial crisis has affected its prospect for business development.
   The three units are Yunnan Yuntianhua Co., Ltd. (Yuntianhua, SH: 600096), Yunnan Malong Industry Group Co., Ltd. (Malong, SH: 600792) and Yunnan Salt & Chemical Industry Co., Ltd. (Yunnan Salt & Chemical, SZ: 002053).
   Malong on November 11th announced a new restructuring plan. It will be Kunming Iron & Steel Co, in stead of Yuntianhua Group, to buy control of Malong. And Malong will become a coal-based chemicals company.
   Upon completion of Malong's regrouping, Malong will be 68.46%-owned by Kunming Steel and 16.56%-owned by Yuntianhua Group.
   Kunming Steel engages in iron ore mining, coal-based chemicals, cement and building materials, nonferrous metals, steel making and property, among others.
   The same day, the listed Yuntianhua and Yunnan Salt & Chemical also announced the termination of their initial restructuring plans.
   Malong chose a new plan probably because the external environment for Yuntianhua Group listing has significantly changed, industry analysts said. Hit by the financial crisis, the phosphate assets originally to be injected into Yuntianhua Group has suffered big loss in the second half of 2008 and in 2009. Also, Malong's major product prices have been weak since the fourth quarter of 2008, which led to a continuous decline in earnings. Malong posted a loss of RMB139 million in the January-September period in 2009 and said future earnings outlook remains uncertain. Thus the company has to undertake a shift in restructuring its main business.
    Yuntianhua Group said it did not rule out the possibility for a new restructuring plan after three months. And the group will keep watching the ongoing and choose an appropriate time to bring forward the restructuring plan.