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Highveld has entered into a sale and purchase agreement with Silicon Smelters (Proprietary) Limited, a subsidiary of FerroAtlantica for the sale of its Rand Carbide division. The effective date of the transaction is expected to be 1 January 2008.
The transaction is dependant upon Competition Authority Approval. The purchase price is R300 million for the business comprising the fixed assets, property, consumable stores, contracts and intellectual property ("the purchase consideration").
The accounts receivable, raw material and finished goods inventory and creditors of Rand Carbide as at the effective date will remain with Highveld. The purchase consideration will be satisfied by the payment of a deposit of R50 million. The balance of the purchase consideration will be paid on the effective date. The Board of Directors will consider possible uses of the proceeds and until such time the funds will be invested.
Rand Carbide is a wholly owned, unincorporated and independently managed division of Highveld. Highveld acquired Rand Carbide during 1978 and it operated as a division of Highveld. Highveld is listed on the JSE under "Steel". Evraz Group S.A. has a 80.9 per cent interest in Highveld.
Rand Carbide produces ferrosilicon ("FeSi"), electrically calcined anthracite ("ECA") and char. The products are currently sold to third party customers in South Africa and internationally as well as to other divisions of Highveld.
Rand Carbide`s share of the South African market is approximately 50 per cent for FeSi, 10 per cent for ECA and 10 per cent for char. The global market share of all these products is insignificant.
The Board of Highveld considered the Rand Carbide assets non-core and consequently agreed to sell.
Telephone: +27 13 690 9911
Email: [email protected]
Website:http://www.highveldsteel.co.za
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