Beijing Shougang to buy into Hyundai's China partner

SHANGHAI, Dec 23 (Reuters) Beijing Shougang Co. Ltd. , the listed unit of China's sixth-largest steel maker, said it would take a 23.62 percent stake in the Chinese partner of Hyundai Motor for 6 million.

Shougang said it would pay 1.06 billion yuan (5.6 million), including 523.88 million yuan in cash and 536.24 million yuan worth of non-core assets, for its state parent's stake in Beijing Automotive Investment Holdings Co. Ltd.

Beijing Automotive, which has a 50-50 venture in Beijing with the South Korean automaker, makes the hot-selling Accent and Elantra sedans in the world's second largest automobile market.

The asset swap plan, which requires shareholders' approval, would improve its competitiveness and growth prospects, Shougang said in a statement on Saturday.

The assets that Shougang will transfer to its parent include stakes in five local companies involved in technology and insurance.

The auto venture, set up in 2002, is building a second plant in the Chinese capital to double its annual capacity to 600,000 units by the end of 2008, making it Hyundai's largest overseas production base.

Beijing Shougang is building a new steel mill to supply value-added steel plates to the automobile, home appliance and construction industries, it said.

The new plant will start operations by the end of next year.

REUTERS DKS PM1337