Outokumpu has signed an agreement with Lujiazui International Trust regarding Shanghai Krupp Stainless (SKS) in China. SKS is a Shanghai-based joint venture between Outokumpu and Baosteel, who have held 60% and 40% shares. Being part of Outokumpu’s business area APAC, SKS has a cold rolling capacity of 290,000t.
Outokumpu will divest 55% of SKS shares to Lujiazui International Trust and will retain 5% share of SKS. It means Outokumpu will continue to operate the cold rolling mill.
Photo courtesy of Outokumpu
The transaction cash value of the divestment of Outokumpu’s 55% holding in SKS is about EUR 370M. After this transaction, Outokumpu’s net debt is expected to decrease by approximately EUR 430M and gearing by approximately 30% points on a pro forma basis. The closing of the transaction is expected by the end of November 2015.
The profit contribution of SKS to Outokumpu has not been material. Following the closing of the transaction, SKS will no longer be considered a subsidiary and Outokumpu ceases to consolidate SKS into its financial statements.
