LNM agrees terms of Polish Treasury Ministry
LNM has agreed terms of Polish Treasury Ministry on August 29, 2003, to acquire PHS.
The terms of the deal has not been disclosed yet, but it is estimated that the purchase will be valued at over $1 billion. The deal will be completed after LNM agrees a social package with trade union for PHS' 16'000 strong workforce and receive approvals from local authorities. Also, the agreement includes PHS' debt of Zloty 1.6 billion (approx. $398 million) to energy and railways.
The transaction will provide LNM to double its capacity in the region up to 14-15 million tons after buying mills in
Romania and Czech Republic.
The deal also ends the chances of
US Steel to purchase PHS.
US Steel has operations in
Slovakia and wants to strengthen its position in flat products for
automotive and home appliance producers.
PHS will receive Zloty 3 billion of state aid by 2006 in order to convert its debts into profit, under a renovation program. Furthermore, PHS will get Zloty 2.4 billion of private fund to expand its product range.
After the renovation program, PHS is anticipated to utilize from strong demand of high quality flat products.