Italcementi strengthens in China. The Italian building materials company has reached an agreement to become the third largest shareholder of West China Cement, with a stake growing to 6,25% and the possibility of appointing a representative to the board of directors. After the news spread, Italcementi shares gained more than two and a half points in Piazza Affari by mid-morning.
To achieve this goal, the agreement provides that "the stake in Fuping Cement - acquired by the group in 2007 - and the 35% stake in Shifeng Cement - acquired by Fuping Cement in 2010 - will be contributed to West China Cement against of a reserved capital increase”, reads a note from Italcementi.
The transaction “was carried out on the basis of a valuation of Fuping Cement – continues the note – equal to approx 87 million euros, gross of the net financial position of approximately 26 million euros, which is thus deconsolidated. Italcementi Group will subscribe 284.200.000 newly issued West China Cement shares at a unit price of HK$2,1815 per share“. The final go-ahead should arrive by June, with the approval of the Chinese authorities.
“Thanks to this operation – he commented the general manager, Giovanni Ferrario – Italcementi Group strengthens its presence in China, the main global market for the building materials sector, by supporting one of the largest private operators in the country, which in addition to its consolidated leadership in the Shaanxi area is pursuing an interesting growth in other regions with a strong growth rate in western China”.
Italcementi points out that West China Cement it is the main operator in the sector in the Shaanxi region and has growth plans also in Western China. Holding listed in Hong Kong since 2010, it has a current capitalization of approximately 780 million euros. The production capacity is about 20 million tons of cement in the Shaanxi and Xinjiang regions, which will rise by the end of the year to about 24 million tons produced in 15 sites, including those in Fuping and Shifeng. In 2011 West China Cement recorded a total turnover equivalent to approximately 380 million euros and a net result of approximately 80 million euros.
