Separation of Hugo Neu and Schnitzer Steel completed
Portland, OR— Schnitzer
Steel Industries, Inc. announced that it and Hugo Neu Corporation
(Hugo Neu) completed the transaction contemplated by the previously
announced Master Agreement that provided for the separation and
termination of various joint venture relationships.
“We not only received very
attractive scrap metal franchises, but an excellent team of motivated
people that have helped build these quality businesses,”
said John D. Carter, president and chief executive officer.
Under the joint venture Master
Agreement, Schnitzer received:
— The assets and related
liabilities of Hugo Neu Schnitzer Global Trade related to the
trading business in Russia, Poland, Denmark, Finland, Norway
and Sweden, and a non-compete agreement from Hugo Neu that bars
them from buying scrap metal in certain areas in Russia and
the Baltic region for a five-year period ending on June 8, 2010.
— The joint ventures’
various interests in the New England operations that primarily
operate in Massachusetts, New Hampshire, Rhode Island and Maine.
— Full ownership in the
Hawaii operations that was previously owned 100% by Hugo Neu.
— A payment of $52.3
million in cash, subject to post-closing adjustments.
Hugo Neu, in exchange, assumed
total ownership of:
— The joint venture operations
in New York, New Jersey and California, including the scrap
processing facilities, marine terminals and related ancillary
satellite sites, the interim New York City Recycling Contract,
and other miscellaneous assets.
— The portions of Hugo
Neu Schnitzer Global Trade, a joint venture engaged primarily
in scrap metal trading, that is not related to the Russian and
Baltic trading business. This was split with HNS Global Trade
redeeming its 50% membership interest from Schnitzer.
The initial announcement that
described the detailed terms of the deal was made on June 9, 2005
and can be obtained on Schnitzer’s website at www.schnitzersteel.com.
In summary, the objective of the separation was to provide each
partner with an equitable portion of the various joint operations.