Aluminum Corp of China (Chinalco), parent of its listed arm
Chalco, has acquired the controlling stake of Northeast Light Alloy
Co Ltd (NELA), a State-owned enterprise in the defense
industry.
Sources told China Daily that a deal was inked over the
weekend in Harbin - where the NELA is headquartered - with Chinalco
agreeing to participate in NELA's restructuring by acquiring 75
percent of its 1.6 billion yuan of assets.
Chinalco is China's largest aluminum and alumina producer. It
paid 1.2 billion yuan to gain the controlling stake of NELA,
considered the nation's largest manufacturer of aluminum and
magnesium alloy.
The other 25 percent of the company is held by the State-owned
assets supervision and administration commission of the Harbin
municipal government, according to sources.
NELA specializes in making not only aluminum and magnesium alloy
for defense and civilian uses but also the machinery for processing
them.
It notched up 1.089 billion yuan in sales revenue in the first
half of this year, with 51 million yuan in net profit. Its aluminum
and alloy products, under the "Swan" brand name, are sold
nationwide and exported to 24 countries and regions.
NELA was developed in the 1950s as part of China's national
industrial backbone with support from the former Soviet Union.
The Harbin-based SOE has since contributed to China's first
aircraft, first atomic reactor, first nuclear weapon, first
missile, first satellite, first nuclear submarine, first carrier
rocket and first spaceship, say company executives.
NELA plans to attract new investment in production lines capable
of processing 120,000 tons annually in products such as large
aluminum alloy plates.
Chalco's NELA deal was its latest move in a string of takeovers
of local rivals. It came on the heels of its announced takeover of
the Inner Mongolia-based Baotou Aluminum through a share swap in
July.
Financial analysts said they anticipate Chinalco will inject
NELA's assets into Chalco, which listed in Hong Kong and New York
in 2001, before issuing A shares in April 2007.
(China Daily September 4, 2007)
