FBU fletcher building limited

Ann: ASSET: FBU: Fletcher Building to sell Pacifi

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    • Release Date: 17/02/14 11:34
    • Summary: ASSET: FBU: Fletcher Building to sell Pacific Steel business
    • Price Sensitive: No
    • Download Document  3.33KB
    					FBU
    17/02/2014 09:34
    ASSET
    
    REL: 0934 HRS Fletcher Building Limited
    
    ASSET: FBU: Fletcher Building to sell Pacific Steel business
    
    Auckland, 17 February 2014 - Fletcher Building Limited today announced it has
    entered into a conditional agreement to sell the downstream long-products
    rolling and marketing operations of Pacific Steel Group (Pacific Steel) to
    BlueScope Steel Limited (BlueScope) in a transaction valued at approximately
    NZ$120 million. The sale includes Pacific Steel's rolling mill and wire
    drawing facilities in Otahuhu together with its Fijian rolling mill.
    
    BlueScope will acquire the Pacific Steel business and construct a new billet
    caster at the Glenbrook site south of Auckland which is operated by
    BlueScope's wholly owned subsidiary New Zealand Steel (NZ Steel). Pacific
    Steel's operations will continue under BlueScope's ownership with the
    exception of the steel mill in Otahuhu, South Auckland. Fletcher Building
    will continue to own and operate the Otahuhu steel mill and will supply
    BlueScope with billet on commercial terms until the new billet caster has
    been commissioned. Once its new billet caster has been built, NZ Steel will
    supply billet from its Glenbrook steel mill to the rolling mill in Otahuhu
    and Fiji.
    
    Construction of the new billet caster at Glenbrook is expected to be
    completed by the end of calendar 2015, following which Fletcher Building will
    decommission its steel mill at Otahuhu.
    
    Fletcher Building will retain an economic interest in the Pacific Steel
    business through profit sharing arrangements until the new billet caster has
    been completed and billet production has been transferred to NZ Steel's
    Glenbrook steel mill.
    
    Fletcher Building Chief Executive Officer Mark Adamson said that having a
    local operator acquire the business was the best outcome to help ensure that
    steel manufacturing in New Zealand remains globally competitive.
    
    "This is a home-grown solution that secures a sustainable future for the New
    Zealand steel industry", Mr Adamson said.
    
    Most of the employees in Pacific Steel's rolling mill and wire drawing
    facilities will be offered employment with BlueScope subsidiaries on terms
    and conditions that are similar to their current arrangements. Staff who are
    not offered employment will remain employees of Fletcher Building to operate
    the steel mill at Otahuhu until it is decommissioned, following which they
    will be given the opportunity to re-train and move to other roles in the
    Fletcher Group.
    
    The transaction does not affect the ownership of Fletcher Building's steel
    distribution business, Fletcher Easysteel, or its steel reinforcing business,
    Fletcher Reinforcing.
    
    Assuming completion by 30 June 2014, Fletcher Building expects to record a
    significant expense item of up to $19 million, reflecting the gain on sale of
    assets, offset by transaction costs and adjustments to asset carrying values.
    
    The transaction is conditional upon a number of matters, including Commerce
    Commission clearance. Assuming all conditions are able to be satisfied, it is
    expected that the transaction will be completed by 30 June 2014.
    
    Further details of the transaction are outlined in the Appendix.
    
    For further information contact:
    
    Philip King
    Group General Manager,
    Investor Relations & Capital Markets
    Phone:  + 64 9 525 9043
    Mobile:   + 64 27 444 0203
    
    Ends
    End CA:00247053 For:FBU    Type:ASSET      Time:2014-02-17 09:34:19
    				
 
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