ZINC PRODUCTION
Padaeng in amalgamation deal
Umicore, the Belgian major shareholder of Thailand's Padaeng Industry (PDI), has reached an agreement with the Australian company, Zinifex, to combine their respective zinc-smelting and -alloying businesses and create the world's leading zinc-metal producer, with operations on four continents.
The combined businesses will be called Nyrstar, producing about 1.2 million tonnes of zinc and zinc alloys per year and employing about 4,500 people, PDI said in the statement to the Stock Exchange of Thailand. PDI's share price rose 25 satang yesterday to close at Bt44. The deal will lead to a change in Umicore's shareholding in PDI. PDI will be the Thai asset of Umicore to be combined under the new venture, as well as its shares in the smelting and alloying operations of Galva in France, Umicore Yunnan Zinc Alloys in China, Balen (Belgium), Overpelt (Belgium), Auby (France) and GM Metal (France). The Zinifex assets to be contributed are the Hobart (Australia), Port Pirie (Australia), Clarksville (the US) and Budel (the Netherlands) smelting and alloying operations as well as its shareholdings in Australian Refined Alloys and Genesis Alloys (China). As of this month, Umicore held a 46.9-per-cent stake in PDI. As part of the agreement, Umicore will transfer 24.9 per cent of its PDI shareholding to Nyrstar. "Due to Thai regulations with regard to foreign ownership, Umicore has limited to 24.9 per cent the contribution to Nyrstar of its stake in PDI. The parties will seek to transfer Umicore's remaining interest of 22 per cent in PDI to Nyrstar prior to its formation, in line with the regulatory processes in Thailand," the statement said. It is expected that Nyrstar will come into existence in September, subject to approval by Zinifex's shareholders, which will be sought in July, and the satisfaction of certain other conditions, including relevant regulatory approvals - most of which have been obtained - and no material adverse changes occurring in the zinc smelting and alloying business of either Umicore or Zinifex. The new conglomerate intends to make an initial public offering of shares "at an appropriate time thereafter", the statement said. The shares of Umicore and Zinifex in Nyrstar will be about 40 per cent and 60 per cent, respectively, reflecting the relative value of the contributed assets. The jointly owned company will be incorporated in Belgium and have its head office in London.
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