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China’s Jiangsu Shagang to be largest shareholder of Dongbei Special Steel

China’s Jiangsu Shagang Co Ltd said on Monday it is expected to be the biggest shareholder of debt-strapped Dongbei Special Steel Group after a bankruptcy restructuring process.

Owned by the Liaoning provincial government in the country’s “rustbelt” northeast, Dongbei Special Steel Group entered into the bankruptcy restructuring process in October aimed at recovering a reported $10 billion in debt, and said it faces “uncertainties” about paying interest on medium-term notes in April.

Jiangsu Shagang, owner of China’s largest private-owned steel mill, said one of its subsidiary is expected to become the biggest shareholder of Dongbei Special Steel Group once the bankruptcy restructuring process is completed.

Jiangsu Shagang did not disclose further details of the investment.

Meanwhile, Bengang Steel Plates Co Ltd said on Monday it plans to invest 1.04 billion yuan ($152.88 million) in Dongbei Special Steel Group, and this would account for 10 percent of Dongbei’s registered assets after the restructuring process.

Also owned by Liaoning provincial government, Benxi Iron & Steel Group, the parent company of Bengang Steel Plates, was reported to be part of a merger with local rival Anshan Iron and Steel. The merger has been getting postponed for years.