Outokumpu signs final agreement on the tubular joint venture
STOCK EXCHANGE RELEASE
23 September 2011 at 3.00 pm EET
Outokumpu and Tubinoxia, an Italian company controlled by Andrea Gatti, have
signed the agreement on the joint venture for Outokumpu's tubular unit (OSTP).
Tubinoxia will become a minority owner of OSTP with an option to become a
majority owner in three years. The joint venture is expected to become effective
from the beginning of October. Its purpose is to turn OSTP into a profitable
entity and staying as an owner in the medium term enables Outokumpu to retain a
substantial part of the expected value increase while still having the intention
to divest the business.
The main terms of the agreement are according to the letter of intent, which was
announced in July. In the first phase Tubinoxia will own 36% of the shares in
OSTP. Additionally, it has an option to acquire shares up to 51% in a three
years' time period. Outokumpu has an option to redeem the shares initially
acquired, at original value, if Tubinoxia will not acquire the majority. It is
also agreed that Outokumpu will remain OSTP's main raw material supplier. The
initial sale of shares will not result in any material financial impacts for
Outokumpu. Outokumpu will initially be responsible for the financing of the
business. Any future sale of shares would be executed at a price that is
reflecting the then prevailing financial performance of the business.
Outokumpu will manage OSTP through a board of directors. The majority of the
members including the chairman will be appointed by Outokumpu as long as
Outokumpu is the majority shareholder. Tore Bäckström, Senior Vice President at
Volvo Bus Corporation with responsibility for the operations in North and South
America, has been appointed chairman of the board. Other members are Andrea
Gatti, Outokumpu's CFO Esa Lager, and Christer Asp, a long-time OSTP executive
who has held numerous positions, amongst others the responsibility for the units
in Jakobstad in Finland and Saudi Arabia.
Andrea Gatti will assume the position of the managing director for OSTP. He has
more than 25-years' experience in the stainless steel industry as an
entrepreneur and he was an Outokumpu executive during 2005-2009. Andrea Gatti
has full trust and support from Outokumpu during the turn-around, which aims for
a clear improvement in the performance of the business. Kalle Luoto from
Outokumpu has been appointed the Chief Financial Officer of OSTP. The turnaround
plan, which includes significant streamlining of the production structure,
optimisation of the product portfolio and general cost reduction will be
finalised during the coming weeks.
OSTP produces welded stainless steel process pipes and tubes as well as threaded
butt weld fittings. It employs some 850 employees and has 10 production sites in
Sweden, Finland, Saudi Arabia, Estonia and Canada. The Wildwood unit in Florida,
USA, previously part of OSTP, will not be part of the joint venture, but will
remain fully owned by Outokumpu.
For further information, please contact:
Mika Seitovirta, CEO, tel. +358 9 421 3200
Karri Kaitue, Deputy CEO, tel. +358 9 421 5506
Andrea Gatti, tel. +39 335 606 4896
Outokumpu is a global leader in stainless steel with the vision to be the
undisputed number one. Customers in a wide range of industries use our stainless
steel and services worldwide. Being fully recyclable, maintenance-free, as well
as very strong and durable material, stainless steel is one of the key building
blocks for sustainable future. Outokumpu employs some 8 000 people in more than
30 countries. The Group's head office is located in Espoo, Finland. Outokumpu is
listed on the NASDAQ OMX Helsinki.