August 2005

Hugo Neu Corporation merges operations with Sims Group and creates recycling division to handle post-consumer materials

New York, NY— Hugo Neu Corporation (HNC) announced that it has merged its operations with Sims Group Limited, one of the largest recycling companies in the world.

The U.S. operations of the combined company will be known as Sims Hugo Neu Company LLC, and will be the largest exporter of scrap steel, and one of the largest recycling companies in the U.S.

Under the terms of the agreement, which was announced in Sydney, Australia, existing Sims Group shareholders will receive a 74% interest in the new Sims Group company, while Hugo Neu Corporation will hold a 26% interest and become the largest single shareholder worldwide. The merger values Hugo Neu Corporation at approximately USD $500 million (AUS $650 million).

Sims Group Chief Executive Jeremy Sutcliffe will become chairman of the U.S. division, Sims Hugo Neu Company LLC, while former Hugo Neu Corporation chairman John L. Neu will serve as vice chairman of the U.S. operations. John Neu will also be appointed vice chairman of Sims Group worldwide.

Donald W. Hamaker, current president of Hugo Neu Corporation, will become chief executive officer of the combined U.S. operations. Rick Jansen (Sims USA’s current president) will be president and COO for the combined businesses. Jeffrey P. Neu will remain as general manager of Sims Hugo Neu Company’s Los Angeles operation.

The company will also create a new division—Hugo Neu Recycling —to oversee post-consumer recycling, including the management of the landmark New York City recycling contract. John Neu will become chairman of Hugo Neu Recycling, while Robert Kelman will continue as the executive in charge of the division.

The merger with Sims Group is the latest move by Hugo Neu Corporation to fulfill its vision of evolving into a global company dedicated to developing new markets and new opportunities in recycling, both of ferrous and non-ferrous metals, and of other non-metallic recyclables including plastic, glass and other post-consumer materials.

On June 9, 2005, Hugo Neu Corporation announced that it had ended its joint venture operations with Schnitzer Steel Industries (SSI). Under the terms of that agreement, HNC and SSI agreed to split its joint ventures, with HNC gaining 100 percent ownership of former joint venture operations in the two largest metropolitan areas in the United States—the New York City metropolitan area, and Los Angeles—among other assets.

The separation of the SSI joint ventures paves the way for merger with Sims Group, which is expected to be completed by the end of the year.

The combined operations of the North American company Sims Hugo Neu Company LLC, will have operations in New York, New Jersey, California, Virginia, Connecticut, Arizona and Canada and will be the largest exporter of recycled metal from both the East and West coasts of the U.S. Earnings from Sims Hugo Neu Company LLC (including current Sims USA) are expected to represent approximately 60% of the Sims Groups earnings worldwide.


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