China’s largest private steelmaker, Shagang Group, has decided to sell 55.1% of Jiangsu Shagang Group to raise funds for diversification beyond steel.

Shares will be sold at 5.29 yuan (86 cents) and once the process is complete Shagang will hold a 19.88% stake in the business, down from 75%. It is likely that the company will reduce its stake even further as 2015 progresses.

Through selling off such a large proportion of the company, Shagang will gain around 4.6 billion yuan (US$734 million) and the money will be used by the company’s e-commerce platform, logistics service and micro-credit company.

Shagang’s e-commerce website launched towards the end of 2014 and is in need of fresh capital, it is claimed.

While the profit margins of domestic steel companies last year was 0.9%, Shagang managed to increase profits by 25.9% and its shares rose 10% to 8.26 yuan (US$1.3).