Due to depressed market trends for the Chinese steel business, the company’s steel manufacturing business has reportedly suffered heavy net losses in recent years. This lead to the board entering into an agreement to sell its wholly owned General Steel (China) co., LTD and its entire equity interest in Shaanxi Longmen Iron and Steel co., Ltd for $1 million to an affiliate of Victory Energy Resource Limited.
Despite the sale, General Steel will still own 32 percent of Tianwu Tongyong (Tianjin) International Trading Co., Ltd, which sources overseas iron ore for steel mills, and 99 percent of Maoming Hengda Iron and Steel Co., Ltd, which holds valuable land assets worth an estimated RMB 250 million.
The company plans to focus on accelerating its cleantech business via their 84.5 percent equity ownership in Catalon Chemical Corp, which develops and manufactures De-NOx honeycomb catalysts and industrial ceramics.
“The timely divesture of the steel manufacturing business is necessary for General Steel in order to preserve liquid assets that will enable the Company to survive and to focus on the promising cleantech business” said Ms. Yunshan Li, Chief Executive Officer for General Steel