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Outokumpu Divests Part of Ownership in Talvivaara
06/02/2011 - Outokumpu has sold all of its shares in Talvivaara Mining Co. Plc to Solidium Oy, a holding company wholly owned by the Finnish State. Outokumpu also sold one-fifth of its 20% holding in Talvivaara Sotkamo Ltd. to Talvivaara Mining, and granted an option for the purchase of the remaining 16% by the end of the first quarter of 2012.
Outokumpu has sold all of its shares in Talvivaara Mining Co. Plc to Solidium Oy, a holding company wholly owned by the Finnish State. Outokumpu has also sold one-fifth of its 20% holding, representing 4% of the shares, in the unlisted Talvivaara Sotkamo Ltd. to Talvivaara Mining, and granted an option to Talvivaara Mining to purchase the remaining 16% by the end of the first quarter of 2012.
If fully exercised, it would result in a total consideration of EUR 240 million. Consequently, the total transaction price if divesting the whole 20% holding in Talvivaara Sotkamo would be EUR 300 million.
Outokumpu says its holding in Talvivaara has been a financial investment and the disposal will improve its financial flexibility.
Outokumpu sold its entire holding of 10,522,366 shares, representing 4.3% of total shares, in Talvivaara Mining. The total consideration of the transaction is EUR 60 million. Outokumpu will record a capital gain of EUR 27 million as financial income in its second quarter 2011 accounts for the transaction.
Outokumpu's 20% holding in Talvivaara Sotkamo Ltd. has been classified in its books as associated companies. After the change in ownership, Outokumpu will no longer have a significant influence in Talvivaara Sotkamo, and thus the remaining 16% holding will be classified as a financial asset valued at fair value through profit and loss on financial statements. As a result of the sale of shares in Talvivaara Sotkamo Ltd and the fair-value accounting of the remaining shares, Outokumpu will record a capital gain of EUR 178 million as financial income in its second quarter 2011 accounts.
The positive impact on Outokumpu's gearing from these transactions is 13 percentage points. The tax impact from these transactions will be marginal and will not result in any current cash payouts.
Outokumpu is a global leader in stainless steel with customers in a wide range of industries. The company employs about 8000 people in more than 30 countries. The Group's head office is located in Espoo, Finland.
