China National Building Materials (CNBM) has begun restructuring its cement business and has subsequently sold China United Cement, Sinoma Cement, as well as a 99.9 per cent stake in South Cement and a 95.7 per cent stake in Southwest Cement, to its Xinjiang Tianshan Cement subsidiary for a total consideration of CNY88.25bn (US$13.64bn).
Tianshan Cement will issue 442,343,026 consideration shares for the amount, alongside a cash consideration of CNY3.97bn. CNBM will have an 87.5 per cent stake in Tianshan Cement after the merger, up from 45.9 per cent previously.
Tianshan is expected to raise CNY5bn from up to 35 investors, including from CNBM, through private placement. The proceeds will mostly be used for the CNY4bn cash provision and to replenish working capital and pay off debts.
The restructuring plan was first announced last year as a method of CNBM reducing single-sector business competition.
