HIGHVELD STEEL AND VANADIUM CORPORATION LIMITED
(Registration No. 1960/001900/06)
("Highveld")
CAUTIONARY ANNOUNCEMENT
Highveld, Samancor Limited ("Samancor") and the Industrial Development
Corporation of South Africa Limited ("IDC"), the partners in the Columbus
Joint Venture ("Columbus"), have signed a non-binding memorandum of
understanding with Acerinox, S.A. of Spain ("Acerinox"), the world's leading
low cost producer of stainless steel, relating to the possible acquisition
by Acerinox of a 64% interest in Columbus with effect from 1 January 2002.
Columbus owns and operates a stainless steel flat products integrated mill
in Middelburg, Mpumalanga.
In terms of the memorandum of understanding it is contemplated that:
Highveld, Samancor and IDC would subscribe equally for an aggregate of 5,8
million new shares in Acerinox, equivalent to an 8,8% interest in the
increased issued share capital in that company, at an issue price of EURO40
per share;
the business of Columbus would be transferred at the end of 2001 into a new
South African company in which Acerinox would acquire a 64% interest for the
Rand equivalent of Euro232 million
The South African company would:
have an initial equity value of approximately R2,5 billion and net debt of
approximately R700 million;
enter into a technical assistance agreement with Acerinox and a ferrochrome
supply agreement with Samancor.
The proposed transactions are subject to formal written agreements being
negotiated and concluded amongst the parties, the satisfactory completion of
due diligence and the requisite approvals from the respective boards,
shareholders, regulatory authorities and other third parties.
Further announcements will be made in due course but meanwhile shareholders
are advised to exercise caution when dealing with their Highveld shares.
Sponsor
Cazenove
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