Commercial Metals Co. announced that its Swiss subsidiary, Commercial Metals International AG (CMI), has submitted a bid to acquire "Zeljezara Split" dd Kastel Sucurac (Split) from the Croatian Privatization Fund.

CMI is apparently one of six bidders who submitted bids in connection with the proposed privatization of Split. Split, an EAF-based steel reinforcing bar mill and wire mesh facility, has approximately 170,000 tonnes of rebar capacity along with 30,000 tons of mesh capacity. Sisak has currently approximately 70,000 tonnes melting capacity and about 300,000 tonnes 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 is considering future expansions including capital expenditures and working capital increase of at least 300 million Croatian kuna (approximately U.S. $54 million). The size of the existing employee workforce, less normal retirements or other natural attrition, will be retained for a minimum of three years under terms of an agreement CMI has already reached with the trade union representing employees at the facility.

"We are very excited about the prospects for Split, and look forward to promptly commencing discussions with the Fund to conclude a purchase contract,” said Hanns Zoellner, President of CMC's Marketing and Distribution segment. “We know the rebar business as CMC is the 3^rd-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,” continued Zoellner. “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."

Commercial Metals Co. and its 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.