IRVING, Texas, April 6 /PRNewswire-FirstCall/ -- Commercial Metals
Company (NYSE: CMC), headquartered in Irving, Texas, announced that its
Swiss subsidiary, Commercial Metals International AG (CMI), has submitted a
bid to acquire "Zeljezara Split" d.d. Kastel Sucurac (Split) from the
Croatian Privatization Fund. Split is an electric arc furnace steel
reinforcing bar mill with a wire mesh facility. This is the second of
Croatia's two operating steel mills for which CMI has submitted a purchase
offer. In February, CMC announced that CMI had submitted a bid for the
Valjaonica Cijevi Sisak (Sisak) pipe mill. All bids for the Sisak mill were
subsequently rejected by the Fund which has requested new bids for Sisak
due by April 17, 2007. CMC is studying the tender request for Sisak and
intends to have CMI submit a bid on or before April 17 for that facility.
Both of these privatization efforts are in preparation for Croatia's
anticipated membership in the European Union in 2009.
CMI is apparently one of six bidders who submitted bids in connection
with the proposed privatization of Split. Split has approximately 170,000
metric tons of rebar capacity along with 30,000 tons of mesh capacity.
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.
CMI's bid for Split, which includes the share purchase price,
assumption of a portion of the debt due to or guaranteed by the Croatian
government as well as the assumption of trade payables, is approximately
155.7 million Croatian kuna (approximately U.S. $28 million). This amount
does not include additional working capital requirements for increasing the
production levels. The bid is subject to execution of a definitive purchase
contract.
In addition to continuing the existing operations at the Split mill,
CMI contemplates future expansions including capital expenditures and
working capital increase of at least 300 million Croatian kuna
(approximately U.S. $54 million). The existing level of the employee work
force, less normal retirements or other natural attrition, will be retained
for a minimum of three years under the terms of an agreement CMI has
already reached with the trade union representing employees at the
facility.
Hanns Zoellner, President of CMC's Marketing and Distribution segment,
stated, "We are very excited about the prospects for Split and look forward
to promptly commencing discussions with the Fund to conclude a purchase
contract. We know the rebar business as CMC is the 3rd largest manufacturer
in the United States and 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 at
Split. Even more exciting is the possibility that CMC will also acquire the
Sisak mill. 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. If our efforts to acquire both Croatian mills are
successful, we can see significant synergies in their operations. Our
worldwide marketing capability in both product lines should improve results
at both facilities.
"These moves fit our strategy to expand production capability in the
key markets of Central and Eastern Europe. The acquisition of Split and
Sisak 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 negotiation of a definitive sales and purchase contract and,
to the extent applicable, regulatory approvals.
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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