On August 27, China's top steelmaker Baosteel Group signed a share subscription agreement with the Australian diversified mining company Aquila Resources Limited to acquire a 15 percent stake in Aquila for AU$290 million, which will make Baosteel Group the second largest shareholder in Aquila. The acquisition is still subject to approval from regulators in Australia and China.
According to the agreement, Baosteel will subscribe for up to 43.95 million new shares of Aquila, paying AU$290 million in cash. Baosteel is to fund the acquisition of the Aquila shares from its current cash reserves. After the deal, the Chinese steel group will be entitled to nominate one director to the Aquila's board of directors.
Baosteel has also inked a memorandum of strategic cooperation with Aquila to further explore project-level investment.
Baosteel Group has said that it holds a positive view of the potential growth of Aquila's assets and that this strategic cooperation also represents a significant and solid step in Baosteel's international expansion.