Moody’s could lift West China Cement

Moody's Investors Service said it placed West China Cement Ltd.’s (WCC) Ba3 corporate family and senior unsecured debt ratings under review for upgrade.

On Nov. 27, Anhui Conch Cement Co. Ltd. (A3 stable) and WCC jointly announced that Conch would sell four of its cement producing companies based in Shaanxi Province to WCC in exchange for new equity shares to be issued by WCC.

If the exchange goes ahead, Conch will become WCC's largest shareholder, with an equity stake of 51.57% from the current 21.17%.

Pursuant to the Hong Kong Takeovers Code, Conch will launch a mandatory unconditional cash offer to WCC's shareholders.

WCC's founding shareholder, Zhang Jimin, his daughter, Zhang Lili, another major shareholder, Ma Zhaoyang, and WCC's chief executive officer, Ma Weiping, agreed not to sell their shares in WCC prior to the closing of the mandatory offer.

The completion of the transactions is conditional upon: (a) the approval by WCC's independent shareholders; (b) the Hong Kong Stock Exchange's grant of a listing and permission to deal in the subscription shares on the stock exchange; and (c) other regulatory approvals by Mainland Chinese authorities.

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