NEW YORK Sims Metal Management Ltd. is reportedly in deals to divest its aerospace division and two scrap facilities in the South and has reduced its workforce in the region, sources familiar with the situation confirmed.
Sources told AMM that Sims is selling Hartford, Conn.-based Sims Metal Management Aerospace Inc. to ELG Haniel GmbH, Duisburg, Germany.
In addition, sources said Sims is selling a scrap facility in Birmingham, Ala., and one in West Point, Miss., to a newly formed company called Steel City Recyclers. AMM had reported previously that Waterloo, Ind.-based MetalX LLC and Birmingham, Ala.-based Jefferson Iron & Metal Brokerage Inc. were rumored to be involved in the acquisition of both Sims facilities (amm.com, April 8).
A Sims spokesman said mid-day Friday the company had no announcements with respect to any transactions or personnel at this time. Late Friday, after the story's publication, a spokesman for the company e-mailed AMM to deny reports of an asset divestment.
"Sims Metal Management Ltd. has not divested its aerospace division and two scrap facilities in the South. As to the rest of the article we continue to have no comment on the accuracy or inaccuracy of the statements regarding personnel or corporate organizational matters," the spokesman said.
MetalX, Jefferson and ELG did not respond to requests for comment.
But while Sims has since denied the reported moves, according to one well-placed source, the sale to ELG was completed June 24 and an official announcement is imminent.
James Nathan, president of Sims Aerospace until the asset sale, is no longer with the company, several sources said. It was not immediately clear who Nathans replacement will be.
In addition to the reported aerospace and scrap facility divestments, sources said Sims also reduced its workforce in Louisiana to five personnel this past week, letting go three employees, reportedly among them Jeff Maynard, a senior marketing executive at the company.
The company intends to consolidate its Gulf and South regional operations, said a second source familiar with the developments.
Brian Souza, a senior executive at the companys Gulf region operations, has resigned, sources said.
In February, Sims posted a net loss of Australian $295.5 million ($304.58 million) for its fiscal first half ended Dec. 31 on revenue that declined 25.2 percent to A$3.43 billion ($3.53 billion) compared with a year earlier due primarily to a reduction of intake and shipments in North America (amm.com, Feb. 22).
Chief executive officer Daniel W. Dienst, who was set to retire from his role at the end of June, said at the time that the company would continue to look at ways to streamline its operations.
"Notwithstanding the implementation of proactive source control, a challenging set of global economic conditions, weaker metals prices, tentative demand for the majority of the period and the impact of adverse significant items resulted in a statutory loss. We are not satisfied with this result and continue our efforts to streamline our North America metals operations," Dienst said in February.
"Through further reduction in controllable costs and the potential monetization of a few residual noncore and underperforming assets, we have now increased our targeted cost savings to $6 million per month in the second half of fiscal 2013, leading to a total annualized controllable cost reduction run rate of circa $70 million by the end of fiscal 2013," he said.