June 27 -- The Inner Mongolian branch of China Construction Bank (CCB) (601939, 0939.HK) plans to sell a 5.63 percent stake in Baotou Iron and Steel Group for 714.96 million yuan, reports China Securities Journal, citing the Chongqing United Assets and Equity Exchange.

The Inner Mongolian provincial government is the controlling shareholder of the steelmaker, with a stake of 73.23 percent, while the remaining stake is held by three asset management firms, according to the report.

According to the filing, the existing shareholders did not waive their rights of first refusal.

Baotou Group, which owns major steel production bases and has the largest rare earth production and research base in China, recorded revenue of 37.87 billion yuan and a loss of 1.89 billion yuan in 2009.

For the first three months of 2011, the group earned 110 million yuan in net profit on revenue of 4.38 billion yuan. The book value of the group as of end June, 2010, was 25.39 billion yuan, with the net assets of the group assessed to be worth 12.19 billion yuan.

The shares that CCB plans to sell have an appraised value of 715 million yuan.

Baotou Iron and Steel Group owns a 61.2 percent stake in Inner Mongolia Baotou Steel Union (600010) and a 38.92 percent stake in Inner Mongolia Baotou Steel Rare- Earth Group Hi Tech.

According to regulations, commercial banks are no longer allowed to own stakes in industrial assets.

Source:CapitalVue