The Aluminum Corporation of China (Chalco), China's biggest alumina producer, announced on Friday it will buy out its subsidiaries through a share swap before returning to the A-share stock market.

Chalco, which listed on the New York and Hong Kong stock markets in December 2001, will issue A-shares to shareholders of its two Shanghai-listed subsidiaries Shangdong Aluminum Industry Co. and Lanzhou Aluminum Industry Co., in exchange for shares of the two companies.

After completing the transactions, Shandong Aluminum and Lanzhou Aluminum will be delisted, while Chalco will apply for integrated listing on the Shanghai bourse with all shareholders of the two companies becoming holders of the parent company.

As the share prices of the subsidiaries are higher than that of Chalco, shareholders of the Shandong Aluminum will receive 3.15 Chalco shares and Lanzhou Aluminum 1.8 shares for each of their own shares.

Analysts say the scheme will solve the problem of the parent company and the subsidiaries are traded on the same market.

Shandong Aluminum share prices fell by 39 percent and Lanzhou Aluminum by 23 percent from their highs this year, closing at 16.65 yuan and 9.5 yuan respectively before suspension of their trading for the restructure.