Jul 24 2007
Commercial Metals Company, headquartered in Irving, Texas, announced today that its Swiss subsidiary, Commercial Metals International AG, has signed a definitive purchase agreement with the Croatian government to acquire Valjaonica Cijevi Sisak (Sisak). Sisak is an electric arc furnace-based steel pipe company with a pipe making capacity of about 305,000 metric tons annually.
CMC will pay HRK 37 million for the shares (about U.S. $7 million), assume debt of over HRK 200 million (about U.S. $41 million), invest about U.S. $40 million in capital expenditures and increase working capital by approximately U.S. $39 million. CMC also has committed to retaining the employees of Sisak for a period of three years. The purchase agreement is subject to closing conditions which are expected to be met within the next sixty days.
Hanns Zoellner, Executive Vice President & President of CMC's Marketing and Distribution segment, stated, "We appreciate the professional manner in which the Croatian government moved this acquisition to conclusion. Sisak will be our base for growth in the robust and key markets of Central and Eastern Europe. We know that this is a turnaround opportunity and are ready to invest to bring this mill to a high level of profitability. Our commitment to our new employees, our expected capital improvements, our environmental investments, and our community involvement will demonstrate to the Sisak area that our interests are long term and mutual to all our important constituencies."