Corus Proposed Sale of Its Downstream Aluminium Businesses for EUR861M -pound 543M-.Business & Financial Editors LONDON--(BUSINESS WIRE)--Oct. 23, 2002 Corus Group Corus Group plc, normally referred to simply as Corus, is one of the world's largest producers of steel, headquartered in London. It was formed from the merger of Koninklijke Hoogovens N.V. plc ("Corus") has today agreed in principle to the sale of its Aluminium Rolled Products and Extrusions businesses ("the Businesses") to Pechiney S.A. ("Pechiney") for EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 861 million ((pound)543 million). The proposed sale to Pechiney substantially concludes Corus' divestment of its aluminium interests announced in March this year. On September 17, Corus completed the sale to Alcan Inc. of its 20 per cent. stake in Alouette, the Canadian aluminium smelter, for US$165 million ((pound)107 million). Total gross proceeds received or due therefore total approximately (pound)650 million (EUR1,031 million). Corus has two smelters at Delfzijl in the Netherlands and at Voerde in Germany. The smelters are not included in this proposed sale and will remain within Corus in the interim until ongoing negotiations with potential purchasers for them are completed. As previously stated, Kalzip, which is an integral part of Corus' Building Systems activities, will be retained within the Group. The purchase price of EUR861 million ((pound)543 million) will be adjusted at completion to reflect interest bearing debt and other provisions, principally in respect of pension obligations, provided for by Corus. As at December 29, 2001 interest bearing debt amounted to EUR25 million ((pound)16 million) and total provisions amounted to EUR97 million ((pound)61 million). There will be a further adjustment to reflect changes in working capital through to completion. The net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). will be applied to reduce debt and further strengthen the Group balance sheet. The Businesses have operations in Germany, Belgium, Canada and China and, for the year ended December 29, 2001, generated EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become of EUR109 million, an operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. of EUR57 million and profit before tax of EUR59 million on turnover of EUR1,549 million. The Businesses had net assets Net assets The difference between total assets on the one hand and current liabilities and noncapitalized long-term liabilities on the other hand. net assets See owners' equity. of EUR574 million at December 29, 2001 (estimated to be EUR595 million as at June 29, 2002). It is intended that a definitive sale and purchase agreement will be entered into following completion of internal consultation, advice and approval processes by both Corus and Pechiney. The completion of the sale is conditional, inter alia [Latin, Among other things.] A phrase used in Pleading to designate that a particular statute set out therein is only a part of the statute that is relevant to the facts of the lawsuit and not the entire statute. , on the approval of Corus shareholders, the European Commission European Commission, branch of the governing body of the European Union (EU) invested with executive and some legislative powers. Located in Brussels, Belgium, it was founded in 1967 when the three treaty organizations comprising what was then the European Community and appropriate regulatory authorities in other jurisdictions including the US. Tony Pedder, Chief Executive of Corus, welcoming the sale of its downstream aluminium activities said: "As well as providing good value to Corus, the proposed sale to Pechiney secures the future of our Aluminium businesses, and represents the major step in the process of divesting our aluminium interests which I announced in March this year." Notes to Editors: 1. Corus and Pechiney are legally prevented from entering into a binding sale and purchase agreement until the employee advice and consultation process is complete. The advice process with Corus' works councils has commenced. 2. Corus Aluminium Rolled Products consists of rolling mills at Koblenz, Germany and at Duffel in Belgium, together with a 60 per cent interest in Corus LP (Canada) at Cap-de-la-Madeleine. Key markets include the aircraft, automotive, heat exchanger heat exchanger Any of several devices that transfer heat from a hot to a cold fluid. In many engineering applications, one fluid needs to be heated and another cooled, a requirement economically accomplished by a heat exchanger. , shipbuilding, engineering and construction sectors. 3. Corus Aluminium Extrusions has plants in Vogt, Bonn and Bitterfeld in Germany; Duffel in Belgium and a 61 per cent interest in a joint venture with Tianjin Non-Ferrous Metal Group, China. Key markets include construction, transport and engineering. 4. Rolled Products and Extrusions employ 4,700 people excluding around 100 associated with aluminium research, development and technology who will be retained by Corus. The Primary Aluminium business has around 1,100 employees. 5. Pechiney is the world's fourth largest producer and converter of aluminium and: -- operates in all facets of aluminium production - bauxite bauxite (bôk`sīt, bŏk`–), mixture of hydrated aluminum oxides usually containing oxides of iron and silicon in varying quantities. , alumina, and primary aluminium; -- is a leading aluminium supplier to transport markets, industrial applications, construction, household appliances and packaging; -- is the world's third largest manufacturer of high value-added speciality packaging; and o has manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. in 24 countries. 6. Under UK GAAP, Alouette contributed a pre-tax profit of (pound)9.2m to the Corus results for the year ending December 29, 2001. The net assets attributable to Alouette as at December 29, 2001 were (pound)53.7m (which includes (pound)7.3m of working capital). 7. The exchange rate used in this announcement is EUR1.585 per(pound)1. 8. Enquiries: Corus Corporate Relations: +44 (0) 20 7717 4502/4505 Corus Investor Relations Investor relations The process by which the corporation communicates with its investors. : +44 (0) 20 7717 4503/4504 Credit Suisse First Boston Credit Suisse First Boston was originally the trading name of the Financière Crédit Suisse-First Boston, a London-based 50-50 investment banking joint venture formed in 1978 between the First Boston Corporation and Credit Suisse. : +44 (0) 20 7888 8888 Stuart Upcraft/Hugh Richards |
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