Tsingshan Holding Group, owned by Chinese tycoon Xiang Guangda, is planning to sell some of its stainless-steel assets in Indonesia to China Baowu Steel Group Corp., Bloomberg reported citing sources.
State-owned Baowu, which is the world’s biggest crude steel producer, is likely to buy controlling stakes in some integrated production lines owned by Tsingshan in the Indonesia Morowali Industrial Park, the report stated.
Who’s Xiang Guangda: Xiang was in the news recently after his bets that nickel prices would fall led to a historic squeeze on the London Metal Exchange earlier in 2022, the report said.
The decision to sell some of his Indonesian assets was in part due to Xiang’s rethinking of his firm’s future during the short-squeeze episode, when he was staring at billions of dollars in mark-to-market losses.
The Deal: The transaction could be worth $3 billion to $4 billion, sources told Bloomberg.
A deal with Baowu would strengthen Tsingshan’s relationship with one of China’s biggest state-owned commodity producers while still allowing it to hold significant exposure to the steel business, the report said.
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