IRVING, Texas, Sept. 19 / -- Commercial Metals Company (NYSE:CMC), headquartered in Irving, Texas, announced today that its Swiss subsidiary, Commercial Metals International AG, has completed the acquisition of all outstanding shares of Valjaonica Cijevi Sisak (VCS) from the Croatian Privatization Fund and Croatian government. VCS's name has been changed to CMC Sisak d.o.o.(CMC Sisak). CMC Sisak is an electric arc furnace based steel pipe manufacturer with annual capacity estimated at about 305,000 metric tons.
The purchase price includes the assumption of all debt owed by VCS to the Croatian government, banks and trade creditors (approximately U.S. $45 million) and an additional payment (maximum of approximately U.S. $7 million) for the shares. CMC Sisak plans to spend not less than U.S. $38 million over five years in capital expenditures and will retain existing employees for a period of three years.
Hanns Zoellner, Executive Vice President of CMC and President of CMC International, stated, "The new name denotes both CMC's financial strength, steelmaking expertise and global market emphasis while continuing the Sisak brand tradition which is synonymous with quality pipes and tubes. With better utilization of existing capacity and increased sales through the CMC International division, we believe CMC Sisak will become a profitable operation achieving our financial targets. Our plans include expenditures for environmental improvements as well as improved efficiency in the steelmaking operation through installation of a new electric arc furnace, a ladle furnace and upgrades to the caster. Our strategy is to expand CMC's production capability in tubular and other products in the key markets of Central and Eastern Europe, and CMC Sisak is the optimal platform for growth in this key region."
Murray R. McClean, CMC's President & Chief Executive Officer, added, "We are pleased with the successful completion of the privatization of CMC Sisak which is very important for the Croatian economy. Our main objective is to make what we now proudly call CMC Sisak competitive in global markets. I am certain with the combined experience and knowledge of our employees, adequate capital investments and the position of CMC in the global marketplace, we will realize that goal and ensure growth and prosperity for CMC Sisak."
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Source: Commercial Metals Company
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