IRVING, Texas, Feb. 20 /PRNewswire-FirstCall/ -- Commercial Metals
Company (NYSE: CMC), headquartered in Irving, Texas, announced that its
Swiss subsidiary, Commercial Metals International AG, has submitted a bid
to acquire Valjaonica Cijevi Sisak (Sisak) from the Croatian Privatization
Fund. CMC is apparently one of two bidders who submitted qualified bids in
connection with the proposed privatization of the electric furnace steel
pipe mill. Sisak has currently approximately 70,000 metric tons melting
capacity and about 300,000 metric tons of tubular manufacturing capacity in
its existing product line which include seamless, welded and cold processed
pipe.
CMC's bid includes the assumption of debt due to or guaranteed by the
Croatian government in the aggregate amount of approximately 180,000,000
Croatian kuna (approximately U.S. $32.2 million) as well as the assumption
of existing trade payables and a minimum purchase price for all Sisak
shares of 37,000,000 kuna (approximately U.S. $6.6 million) with potential
additional payments of 44,000,000 kuna (approximately U.S. $7.9 million).
The bid is subject to execution of a definitive purchase contract.
In addition to continuing the existing operations at the mill, CMC
contemplates future expansions including capital expenditures and working
capital increase of at least 347,000,000 kuna (approximately U.S. $62.1
million). The existing level of the employee work force, less normal
retirements or other natural attrition, will be retained for a minimum of
two years.
Hanns Zoellner, President of CMC's Marketing and Distribution segment,
stated, "We are very excited about the prospects for Sisak and look forward
to promptly commencing discussions with the Fund to conclude a purchase
contract. With the experience and success we have enjoyed following the
acquisition of a majority interest in CMC Zawiercie, our Polish mill, we
are confident we can achieve the same results in Croatia. CMC's marketing
group annually markets close to 500,000 metric tons of tubular products
globally and has previously sold pipe products produced by Sisak. We know
their Commercial Metals Bids to Acquire Croatian Mill reputation in the
market as a dependable supplier of quality product and believe CMC offers a
unique combination of electric arc furnace operating expertise and
significantly enhanced marketing capability for the mill. Our strategy is
to expand production capability in the key markets of Central and Eastern
Europe. This acquisition would definitely fit with CMC's strategic
objectives."
Forward-Looking Statements
This news release contains forward-looking statements regarding the
possible transaction discussed. There is inherent risk and uncertainty in
any forward-looking statements. CMC can provide no assurance with respect
to the timing, value or final determination by the Fund or CMC to proceed
with any transaction. The transaction is subject to the satisfactory
completion of additional due diligence review, negotiation of a definitive
sales and purchase contract and, to the extent applicable, regulatory
approvals. CMC will have no further comment concerning the contemplated
transaction until a definitive agreement is signed or any further
negotiations with the Fund have terminated.
Commercial Metals Company and subsidiaries manufacture, recycle and
market steel and metal products, related materials and services through a
network including steel minimills, steel fabrication and processing plants,
construction-related product warehouses, a copper tube mill, metal
recycling facilities and marketing and distribution offices in the United
States and in strategic overseas markets.
SOURCE Commercial Metals Company
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Related links:
http://www.cmc.com
CONTACT:
Debbie Okle, Director, Public Relations of
Commercial Metals Company, +1-214-689-4354
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