SHANGHAI -- Hunan Valin Steel announced on Wednesday that European steelmaker ArcelorMittal will sell its 10% stake in the midsize Chinese steelmaker to a government-affiliated investment fund in Hunan Province for around 1.1 billion yuan ($165 million).
Hunan Valin is a listed company operating under the wing of state-owned steelmaker Hunan Valin Iron & Steel Group. ArcelorMittal will divest its entire stake as Hunan Valin Steel changes its main business from steel to "finance and energy-conservation-related businesses," according to Hunan Valin Steel's announcement. It was unclear whether the parent company would continue in the steel business.
As China's economic growth has slowed, its steel industry has been saddled with severe excess production capacity. To reduce capacity, the government is stressing corporate culling and restructuring.