Australia's largest steelmaker,BlueScope Steel,is buying the remaining 50% of North Star BlueScope Steel from Cargill for 742 million dollars US,having previously bought a 50% stake in North Star.BlueScope,of Melbourne,Victoria,will assume North Star's net debt of 40 million.The transaction will amount to a fiscal 2015 multiple of 7.1 and cash flow of 0.26 per share for BlueScope.*
North Star has delivered consistent financial performance and strong returns on investment capital to BlueScope,said BlueScope Managing Director and CEO Paul O'Malley.The asset is highly regarded within the US steel sector.Full ownership enhances BlueScope's portfolio value and optionality and improves business flexibility.The North Star business delivers on our strategy of being cost competitive on steelmaking and is best in class.It is anticipated the transaction will be funded through a combination of US capital markets issuance and longer term bank debt,Mr.O'Malley added.
North Star is a high quality,structurally advantaged asset;centrally located within a large scrap pool;operates close to its core markets;has low conversion costs;and benefits from a highly motivated and focused workforce,he pointed out.*
North Star has 380 employees.They produce 2.0 million tonnes of hot rolled coil a year at its mini-mill in Delta,Ohio.BlueScope plans to bring the debt down through targeted divestments and operational cash flow.*
BlueScope Steel Ltd (PINX:BLSFF),(BSL:ASE)
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