(Reuters) - Hebei Iron & Steel had received regulatory approval to raise up to 16.02 billion yuan ($2.5 billion) from additional sale of up to 3.8 billion A-shares, the company said in a filing to the Shenzhen Stock Exchange.

Proceeds will be used to acquire a 100 percent stake in Hanbao Steel, wholly-owned by Handan Steel Group, a major subsidiary of Hebei Steel Group China's biggest steelmaker in terms of output.

Hanbao Steel mainly produces low-carbon structural steel, low-alloy structural steel as well as other high-end steel products.

Hebei shares were trading up 0.4 percent, having risen over 20 percent so far this year.

($1 = 6.528 Chinese yuan) (Reporting by Ruby Lian and Jacqueline Wong; Editing by Kazunori Takada)