Xingfa Aluminium resumes trading after privatisation announcement

China Xingfa Aluminium, which on September 15 halted trading ahead of a takeover announcement, announced this morning shares would resume trading after it filed an announcement last night proposing the company’s privatisation.

The director of the firm and that of it’s largest shareholder – a subsidiary of state-run investment firm Guangdong Guangxin Holdings – plan to offer a cancellation price of HK$3.70 per share, a premium of 24.58 per cent over the company’s most recent closing price on September 14, on which day shares jumped 7.61 per cent.

Shares in the company jumped as much as 21.2 per cent in early trade in Hong Kong.

The privatisation is pending approval from Guangdong’s state-owned assets regulator and other authorities, though given the pedigree of Xingfa’s largest shareholder a green light seems likely.

If successful, the de-listing would facilitate the merger of Xingfa with another state firm, as consolidation among China’s often loss-making state companies in commodities and heavy industry, pushed by Beijing with an eye toward producing national champions, has been a theme in recent years.

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