Commercial Metals to Acquire Croatian Mill
07/24/2007 - Commercial Metals signs definitive purchase agreement with the Croatian government to acquire Valjaonica Cijevi Sisak for HRK 37 million for the shares, in addition to (about U.S. $7 million), assume debt of over HRK 200 million (about U.S. $41 million), invest about U.S. $40 million in capital expenditures, and increase working capital by approximately U.S. $39 million f
Commercial Metals Co., through Swiss subsidiary Commercial Metals International AG, has signed a definitive purchase agreement with the Croatian government to acquire Valjaonica Cijevi Sisak.
CMC will pay HRK 37 million for the shares (about U.S. $7 million), assume debt of over HRK 200 million (about U.S. $41 million), invest about U.S. $40 million in capital expenditures, and increase working capital by approximately U.S. $39 million for Sisak, an EAF-based steel pipe company with a pipe-making capacity of about 305,000 metric tonnes per year.
“We appreciate the professional manner in which the Croatian government moved this acquisition to conclusion,” said Hanns, Executive Vice President & President of CMC's Marketing and Distribution segment. “Sisak will be our base for growth in the robust and key markets of Central and Eastern Europe. We know that this is a turnaround opportunity and are ready to invest to bring this mill to a high level of profitability.”
In addition to its financial commitments, CMC also has committed to retaining Sisak’s employees for a period of three years.
“Our commitment to our new employees, our expected capital improvements, our environmental investments, and our community involvement will demonstrate to the Sisak area that our interests are long term and mutual to all our important constituencies,” said Zoellner.
The purchase agreement for the acquisition of Sisak is subject to closing conditions that are expected to be met within the next sixty days.
Headquartered in Irving, Texas, Commercial Metals Co. 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.
