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Kallanish Kallanish

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April, 18th 2021

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MAR 02
11:33

Sinosteel applies for bankruptcy

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Sinosteel Group subsidiary Sinosteel Company, which has suspended operations since 2016, has now filed for bankruptcy due to excessive debt, Kallanish notes. Chinese steel giant Baowu Group announced last year it intended to take over the steel firm.

As of 31 December 2019, Sinosteel's liabilities totalled CNY 2.96 billion ($457.6 million), and its assets were CNY 743.66m. Total shareholder debt is approximately CNY 2.2 billion. The accounts receivable of more than ten subsidiaries of the company once reached CNY 15 billion. The company's former general manager, Xin Xile, has also been charged with corruption.

The two listed subsidiaries of Sinosteel, Sinosteel International and Sinosteel Tianyuan, simultaneously issued announcements last October that they had received Baowu's notice of future custody over Sinosteel. The specific plan is still under discussion, but is expected to involve Baowu taking over some management functions at the company. Sinosteel focuses on international trade and transportation of raw materials in the steel industry.

According to Sinosteel Group data, the group controls a total of 3 billion tonnes of iron ore and 200 million tonnes of chromium ore resources. It also possesses 60mt of nickel ore resources in China, Australia, Cameroon, South Africa, Zimbabwe, Indonesia, and the Philippines.

By Kallanish Team