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Corus' aluminium deal torpedoed
LONDON, England (Reuters) -- Anglo-Dutch metals group Corus Group faced a humiliating end to plans to sell off its aluminium assets on Tuesday when its own Dutch supervisory board rejected the $830 million deal. Corus, created in 1999 through the merger of Dutch Hoogovens and British Steel, said the Dutch board had rejected the sale of the assets to French aluminium giant Pechiney, which agreed last October to buy them for 750 million euros ($828 million). Corus management, under pressure to complete the sale so that it can pay down its debts, said it would fight the board's decision in a Dutch court, raising the extraordinary spectacle of a legal battle to obtain internal approvals for the deal. "It is the view of the board of Corus that the Supervisory Board has acted irresponsibly and unreasonably in rejecting the sale,'' Europe's largest steel maker said in a statement. The sale to Pechiney has been bogged down in the face of opposition from Corus' Dutch workforce. Most of the assets being sold are in the Netherlands, and the Dutch workers want the proceeds to be reinvested in the firm's Dutch operations. But Corus, in negotiations with its bankers to renew a 1.2 billion pound ($1.91 billion) loan facility that expires next January, insists it will use the money to retire debt. A dealer said Corus' London shares were expected slide around 14 percent to 11-12 pence. "There would need to be a rescue rights issue, but at goodness knows what price,'' a London trader said when asked what would happen if the sale collapsed. Pechiney said it was studying the situation and added that the problem was entirely internal to Corus. Corus said it would file a request before the Enterprise Chamber of the Amsterdam Court of Appeal later on Tuesday to allow the sale to proceed. "Corus anticipates the decision from the court on Thursday... and Corus will inform shareholders as soon as it is available.'' Corus also said it was considering steps to stem losses from its British steel-making businesses, including major cuts to capacity and concentrating operations on fewer sites. The company also said in a statement it expected a 2002 operating loss of 393 million pounds, excluding a net charge for exceptional items of 53 million pounds. Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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