CHINA railway rolling stock manufacturers CNR and CSR have submitted the first draft of a merger plan to the State Council or Chinese cabinet for approval, reports Xinhua.
Earlier, Xinhua reports citing a source from the government's supervisory body for state-owned firms, said such a plan was afoot, but provided no further details.
Then came reports quoting sources in the government in Guangzhou's the 21st Century Business Herald newspaper, saying CSR would buy all CNR shares via a secondary public offering, and that the latter would delist from the stock market.
A CNR official contacted by Reuters declined to comment on the reports and referred to the company's previous filings. CSR did not immediately answer calls for comment.
Shares in the two firms have been suspended since October 27 amid reports that the government is merging them to create a giant able to compete with the likes of Germany's Siemens and Canada's Bombardier for high-speed rail orders abroad.
Both firms have extended their share suspensions, citing the "complexity" of the matters both were dealing with which they said may "result in significant asset restructuring".
Source : HKSG.