Hunan Valin Steel’s second biggest shareholder ArcelorMittal will sell its holding of 303 million shares, or 10.08% of total shareholding, to Guoxin Funds, Valin says.

On 2 August, Guoxin Funds and ArcelorMittal both signed an equity transfer agreement at a transfer price of CNY 1.1 billion ($166 million), according to a Valin announcement.

Following industrial restructuring, Valin Steel aims to transform its major business of iron and steel into finance and energy conservation plus environmental protection, the Chinese steelmaker says. This will no longer fall within the scope of Arcelor Mittal's core business, it adds.

Meanwhile ArcelorMittal confirms to Kallanish that following Valin’s decision to restructure, the Luxembourg-based steelmaker has decided to sell its 10.08% shareholding in Valin Steel. “The disposal, which is subject to regulatory approval, is in-line with ArcelorMittal’s strategy of portfolio optimisation and maintaining a focus on its core business,” it says.

ArcelorMittal’s automotive steel joint venture with the Valin Group, VAMA, is unaffected by the share sale. VAMA produces and supplies advanced automotive steel light-weight solutions to automotive OEMs, helping them to meet evolving standards of safety and energy efficiency as required by the Chinese automotive industry, ArcelorMittal adds.

Valin is the most important stock exchange-listed company within Hunan province’s State-owned Assets Supervision and Administration Commission (SASAC).

Another steel company, Baosteel subsidiary Shaogang, also wants to exit its steel business and enter the financial sector. This move has been unsuccessful so far because of the complex administrative procedure which must be undertaken before this can happen.  This complexity of process may therefore cast doubts on Valin’s ability to change its direction, market sources suggest.