SINGAPORE Australias Arrium Ltd. has hired an investment bank to sell its 50.3-percent stake in New Zealand-listed Steel & Tube Holdings Ltd.
The Lower Hutt, New Zealand-based company, which processes and distributes a range of steel and allied products in the construction, manufacturing and rural industries, will be sold to institutional and retail investors at a fixed price of New Zealand $2.05 ($1.70) per share, Arrium said Tuesday.
The proceeds of approximately NZ$91.2 million ($74.5 million) will be used to reduce Arriums debt and gearing levels, it said.
The sale of Steel & Tube Holdings "reflects further progress with our steel footprint and product portfolio review, which commenced last year and led to the earlier sale of our Piping Systems business," Arrium managing director and chief executive officer Geoff Plummer said in a statement.
"We are continuing to progress further opportunities mainly related to our non-integrated steel businesses," he added.
The Sydney-based company last week rejected an Australian $1-billion ($1.02-billion) takeover bid put forward by a consortium led by Hong Kongs Noble Group Ltd. and Pohang, South Korea-based steelmaker Posco Ltd. (amm.com, Oct. 1).
While the consortium said it "can make Arrium a more competitive steel producer by improving production processes, operating efficiency and investment in technology to lower the cost of production," it is reportedly more interested in the latters iron ore business.
Arrium currently has an annual sales capacity of more than 6 million tonnes of iron ore, and plans to expand that to some 11 million tonnes by mid-2013.