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January 16, 2008 |
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IHI CORP: Shares Rise on JFE Holdings Tie-Up Report Shares in IHI Corp. rose sharply on Friday after a newspaper report that said it is in talks with JFE Holdings Inc. regarding a merger of some of their operations, the Associated Press says. IHI rose 1.4% to close at JPY218 after rising as much as 7.4% on the report, AP relates. Shares of JFE finished the day 0.5% lower at JPY5,580, although they rose as much as 4.4% in the morning session, AP adds. Both companies, the report notes, outperformed the Nikkei 225 index, which fell 1.9% to its lowest close in more than two years. As reported in the Troubled Company Reporter-Asia Pacific on Jan. 14, 2008, IHI is in talks with JFE Holdings to combine shipbuilding operations this year to create Japan's largest company to compete against South Korean and Chinese shipyards. The new company, the TCRAP noted, would have sales of about JPY345 billion to become the sixth biggest shipbuilder in the world. According to AP, the IHI and JFE separately issued statements saying they had made no decisions on any restructuring of their shipbuilding units. The Nikkei business daily earlier reported that JFE and IHI are looking to consolidate their shipbuilding businesses via Universal Shipbuilding Corp., a 50-50 joint venture of JFE and Hitachi Zosen Corp. AP cites the Nikkei as saying that based on FY2007 sales projections, a combination of the two companies have sales of roughly JPY345 billion (US$3.1 billion) a year. With its total annual vessel production reaching about 3 million tons, it would have a domestic market share slightly above 18%, the paper added. About IHI Corp. Based in Tokyo, Japan, IHI Corporation, -- http://www.ihi.co.jp -- formerly Ishikawajima-Harima Heavy Industries Co., Ltd., is a Japan-based company engaged in six business segments. The Logistics and Steel segment offers concrete products, automated storages, loaders and others. The Machinery segment offers plastic processing machines, industrial boilers, pumps and others. The Energy Plant segment develops waste incineration facilities, nuclear power plants, thermal power plants and process plants, water treatment plants, renewable power plants and other facilities. The Aerospace segment produces aircraft engine parts and provides aircraft maintenance services. The Ship and Offshore segment builds container ships, bulk carriers, tankers and other ships, as well as develops marine equipment and machinery and provides design and engineering services. The Others segment provides real estate, financial and insurance services. The Troubled Company Reporter-Asia Pacific reported on July 13, 2007, that Standard & Poors Rating Agency affirmed its BB+ long-term corporate credit rating with a positive outlook. |
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