Chinese Steelmaker Enters Clean Technology Sector
09/16/2015 - China's General Steel Holdings Inc. is acquiring a majority equity stake in a manufacturer of industrial ceramics and a product used in systems that reduce air pollution, the company has announced.
General Steel Holdings, which is owned independently of China's government, said it is taking an 84.5 percent interest in Catalon Chemical Corp. through a share exchange agreement. The deal is to close by 30 September.
Under the agreement, Catalon shareholders will receive up to 13 million shares of General Steel's common stock, an equivalent value of US$16.9 million. The company said that based on General Steel's 15 September closing price, the equivalent value of US$1.30 per share represents a 97 percent premium to its 20-day volume weighted average price of 66 cents per share. The company trades on the NYSE.
The number of General Steel shares that ultimately are issued is dependent Catalon hitting sales and net profit targets, General Steel said.
U.S.-based Catalon makes a product called a honeycomb catalyst, which is a key part of the selective catalytic reduction process widely used in steel mills, power plants, diesel engines and waste incinerators, among others. The process removes nitrogen oxides from air emissions.
General Steel CEO Yunshan Li said in a statement that Catalon has been a leader in research and development and commercialization of honeycomb catalysts for nitrogen oxide removal.
"We believe Catalon's comprehensive suite of products and services is an ideal fit for General Steel and a great leap forward for our business transformation," she said.
And she should know -- she is co-founder of Catalon and its former CEO. Li began her duties with General Steel in July.
During her first General Steel earnings call in August, Li told analysts that she thought clean technology and environmental protection presented a huge market opportunity, one that could help advance General Steel's transformation.
"Catalon's honeycomb catalytic technology effectively reduces (nitrogen oxide) emissions, which is a sorely needed solution to China's currently huge industrial pollution problems. And with General Steel's vast resources, strong market presence and broad distribution platform, we fully expect being able to capture a meaningful share of the large and rapidly growing clean tech business in China," Li said in a statement.
Catalon CEO and CTO Steven Chu said that the company conducted an extensive review of strategic alternatives and concluded that General Steel would be an ideal partner to help it commercialize the technology in China.
"We were impressed by General Steel's technical leadership in steel manufacturing and its unique market position and access in China's burgeoning industrial heartland," he said in a statement.
Under the agreement, Catalon shareholders will receive up to 13 million shares of General Steel's common stock, an equivalent value of US$16.9 million. The company said that based on General Steel's 15 September closing price, the equivalent value of US$1.30 per share represents a 97 percent premium to its 20-day volume weighted average price of 66 cents per share. The company trades on the NYSE.
The number of General Steel shares that ultimately are issued is dependent Catalon hitting sales and net profit targets, General Steel said.
U.S.-based Catalon makes a product called a honeycomb catalyst, which is a key part of the selective catalytic reduction process widely used in steel mills, power plants, diesel engines and waste incinerators, among others. The process removes nitrogen oxides from air emissions.
General Steel CEO Yunshan Li said in a statement that Catalon has been a leader in research and development and commercialization of honeycomb catalysts for nitrogen oxide removal.
"We believe Catalon's comprehensive suite of products and services is an ideal fit for General Steel and a great leap forward for our business transformation," she said.
And she should know -- she is co-founder of Catalon and its former CEO. Li began her duties with General Steel in July.
During her first General Steel earnings call in August, Li told analysts that she thought clean technology and environmental protection presented a huge market opportunity, one that could help advance General Steel's transformation.
"Catalon's honeycomb catalytic technology effectively reduces (nitrogen oxide) emissions, which is a sorely needed solution to China's currently huge industrial pollution problems. And with General Steel's vast resources, strong market presence and broad distribution platform, we fully expect being able to capture a meaningful share of the large and rapidly growing clean tech business in China," Li said in a statement.
Catalon CEO and CTO Steven Chu said that the company conducted an extensive review of strategic alternatives and concluded that General Steel would be an ideal partner to help it commercialize the technology in China.
"We were impressed by General Steel's technical leadership in steel manufacturing and its unique market position and access in China's burgeoning industrial heartland," he said in a statement.
