(Yicai Global) Oct. 27 -- Chongqing Iron & Steel Co. [SHA:601005] failed to auction off its No. 2 steel plant, steel bar and structural steel businesses in its second attempt to do so, Rmfysszc.gov.cn reported.
The starting price was just over USD600 million (CNY4 billion), only about 40 percent of the price of CNY10 billion set for the first auction. The businesses are valued at CNY5.113 billion.
The first auction was aborted as the volume of assets involved was huge and few bidders could afford their asking price. Another auction will be held, National Business Daily quoted the firm's bankruptcy administrator as saying after the second unsuccessful one.
When asked if the second failed attempt will affect the company's reorganization efforts, a source at the firm's board secretary office said, "We don't have the details either."
As the largest steelmaker in Southwest China, Chongqing Iron & Steel is heavily indebted, and its profitability has not improved despite a strong recovery in the Chinese steel market from last year.
Chongqing Iron & Steel registered a net loss attributable to the parent company of CNY4.685 billion last year. It has been operating at a loss for three years, meaning that it will have to delist from the A-share market if fails to make ends meet this year.
The steelmaker's bankruptcy reorganization is in progress. Steel business reorganization officials in Chongqing had received 1,450 debt claims totaling CNY38.366 billion as of Oct. 10.