Comprehensive M&A data with integrated detailed company information

Yunnan Aluminium to raise CNY 4.5bn
Posted on Friday, 17 February 2017 10:03
Yunnan Aluminium is going cap in hand to investors for CNY 4.50 billion (USD 656.00 million) to invest in hydropower assets, and ultra-thin aluminium foil and low-grade bauxite projects.

The Kunming-headquartered aluminium and carbon products manufacturer and processor has decided to sell up to 729.34 million shares to as many as 10 subscribers, including majority stockholder Yunnan Metallurgical Group.

Aluminium is usually extracted from bauxite, an ore made from a mixture of aluminium hydroxide, iron oxide, titanium dioxide and kaolinite.

However, because it is so reactive, the boron group element can only be removed by electrolysis, which in turn requires a huge amount of electricity.

Smelters tend to be built close to large power stations, in particular hydroelectric ones as the energy produced is generally inexpensive and clean, and is more economically attractive for the manufacturers.

Formed in the 1970s, Yunnan Aluminium is an integrated enterprise combining bauxite mining, alumina refining, aluminium smelting and processing and carbon products manufacturing.

In order to maintain competitiveness, the company has expanded its business profile and today its portfolio includes pre-baked anodes, ingots for remelting and aluminium rods for electrical purposes, among other things.

As of 30th September 2016, its top shareholders ranged from Yunnan Metallurgical, with a 42.6 per cent stake, and Haitong Securities to China Construction Bank and Guohua Life Insurance.

Revenue amounted to CNY 15.85 billion in the financial year ended 31st December 2015, and CNY 11.10 billion in the first nine months of 2016.

Net profit totalled CNY 29.39 million in FY 2015 and CNY 181.54 million for the combined three quarters of 2016.

The cash call should improve Yunnan Aluminium’s capital structure by reducing its asset-liability ratio and financial costs, as well as funding the purchase of stakes in three hydroelectric power companies for a total CNY 2.10 billion.

It is also in line with the government’s push for listing companies to support industrial development and production in poor areas via mergers and acquisitions and investments.

© Zephus Ltd