Germany's Schaeffler Group, the world's second-largest bearing company, will not give up its pursuit of state-owned Luoyang Bearing's assets, the official Shanghai Securities News reported, citing Gou Jianhui, managing director of Schaeffler (China).

Luoyang Bearing Group in Henan province is being reorganized by Yongcheng Coal and Electricity (Group) Co Ltd, which agreed to invest 250 mln yuan for a 62.5 pct stake in the company, the report said.

The company that will emerge from the restructuring will have its capital expanded and may take on foreign strategic investors, providing a possible entry point for Schaeffler, the report said.

In May 2006, Schaeffler reportedly agreed to pay 1.1 bln yuan for most of Luoyang's assets and to invest 1 bln yuan in building new facilities. However the government blocked the bid and barred foreign parties from taking control, citing the need to protect vital Chinese industries

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