IRVING, Texas, April 27 /PRNewswire-FirstCall/ -- Commercial Metals
Company (NYSE: CMC), headquartered in Irving, Texas, announced today that
the second bid dated April 17, 2007, of its Swiss subsidiary, Commercial
Metals International AG, to acquire Valjaonica Cijevi Sisak (VCS) has been
accepted by the Croatian Privatization Fund and Croatian government. VCS is
an electric arc furnace based steel pipe company with a pipe making
capacity of about 305,000 metric tons annually.
CMC's bid includes the assumption of all the debt of VCS totaling over
HRK 250 million (approximately U.S. $45 million) towards the Croatian
government, banks and trade creditors. The bid also includes HRK 10 million
(about U.S. $2 million) for the shares or alternatively HRK 37 million
(approximately U.S. $7 million) subject to termination and indemnity with
regard to certain alleged contract obligations as well as a capital
expenditure program worth U.S. $38 million over a five-year period. CMC
also assumes the obligation of retaining the employees of VCS for a period
of three years. The bid is subject to execution of a definitive purchase
contract.
Hanns Zoellner, President of CMC's Marketing and Distribution segment,
stated, "We are very glad the Croatian government has accepted our offer,
and we look forward to concluding quickly the transaction and signing the
share purchase agreement. Through better utilization of existing capacities
and increasing sales through our Marketing and Distribution group, we
believe the pipe mill will become a profitable operation in line with our
corporate financial targets. Our plans comprise investment into
environmental areas and improvements in the steelmaking operation through
installation of a new electric arc furnace and a ladle furnace and upgrades
to the caster. Our strategy is to expand CMC's production capability in
tubular and other products in the key markets of Central and Eastern Europe
using VCS as a base for our growth in this dynamic region of Europe.
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 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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