(Yicai Global) Feb. 2 -- China Baowu Steel Group, the country’s biggest producer of the metal alloy, has been handed a controlling 90 percent stake in Kunming Iron and Steel Holding free of charge.

The State-owned Assets Supervision and Administration Commission of southwestern Yunnan province will retain 10 percent of Kunsteel after transferring the rest to Baowu, Kunsteel unit Yunnan Coal and Energy said in a statement yesterday. The state assets manager wants Baowu to run Kunsteel and will try to finish the registration change within six months.

Over the past two years, Shanghai-based Baowu has acquired Masteel Group, Taiyuan Iron and Steel Group and Chongqing Iron and Steel. It has also managed Sinosteel Group under trust and integrated steel companies in the Xinjiang Uygur Autonomous Region. Baowu is now the world’s largest steel producer and is likely to boost its capacity to 152 million tons a year.

Formed in 1939, Kunsteel had about CNY65 billion (USD10.1 billion) of assets as of last September. Its core asset, Kunming Iron and Steel Joint Stock, which can make 8.27 million tons of crude steel a year, is Yunnan’s largest steelmaker.

The joint stock company had a net loss of CNY360 million (USD55.6 million) in the first nine months of last year on operating revenue of CNY27.5 billion because of the Covid-19 pandemic and a long shutdown for the Spring Festival holiday.

Wuhan Iron and Steel Group, which merged with Baosteel Group to form Baowu in 2016, bought 48.41 percent of Kunming Iron and Steel Joint Stock for over CNY3 billion in 2007 to become its largest shareholder. Kunsteel remains the second-biggest owner with 47.41 percent.

Editor: Peter Thomas