Commercial Metals’ acquisition bid accepted
Commercial Metals Company announced 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 US$45 million) towards the Croatian government, banks and trade creditors. The bid also includes HRK 10 million (about US$2 million) for the shares or alternatively HRK 37 million (approximately US$7 million) subject to termination and indemnity with regard to certain alleged contract obligations as well as a capital expenditure program worth US$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.