Perth-based Vietnam Industrial Investments Ltd has announced plans to sell its stake in two subsidiaries, concrete-reinforcing steel bar producers Vinausteel Ltd and Ssesteel Ltd to Tata Steel subsidiary NatSteel Asia for an expected $10.8 million.
Perth-based Vietnam Industrial Investments Ltd has announced plans to sell its stake in two subsidiaries, concrete-reinforcing steel bar producers Vinausteel Ltd and Ssesteel Ltd to Tata Steel subsidiary NatSteel Asia for an expected $10.8 million.
The net purchase consideration payable to VII will be determined following a post completion audit, though a share deal is expected to be a part of the agreement.
VII, which holds a 70 per cent stake in Vinausteel and 100 per cent of Ssesteel, will retain its 67 per cent stake in roofing and wall cladding producer Austnam Joint Stock Corporation, 97 per cent holding in building systems provider Total BuildingSystems Ltd and total ownership of weldmesh company VRC Weldmesh (Vietnam) Ltd.
The company siad in an announcement it was investigting other opportunities to enhance shareholder value.
The full text of a company announcement is pasted below
The Company wishes to advise that the VII Board has agreed commercial terms to sell the Company's 70% interest in Vinausteel Ltd ("Vinausteel") and 100% interest in SSESTEEL Ltd ("SSESTEEL") to NatSteel Asia Pte Ltd, a wholly owned subsidiary of Tata Steel and unrelated to the VII Group of companies. The parties have entered into a Share and Purchase Agreement.
Completion of the Share and Purchase Agreement will not occur until several conditions precedent have been satisfied including the approval of VII shareholders and a post completion audit. Further details of the conditions precedent are annexed to this announcement.
The indicative purchase consideration will be adjusted based on a number of factors, including Vinausteel and SSESTEEL being debt free and a minimum net working capital and tangible fixed asset value. The net purchase consideration payable to VII will be determined following a post completion audit. Based on the audited financial statements as at 31 December 2006, the Company expects that the amount it will be paid at completion, net of consultant's fees, will be approximately US$10.8 million. However, the actual amount may be higher or lower depending on the above factors. The expected amount of US$10.8 million includes approximately US$2.7 million which will be held in escrow pending recovery of certain receivables and finalisation of tax matters and this could further reduce the net purchase consideration.
On completion of the sale of these two businesses, VII will retain its ongoing businesses and investments in the following operations; Austnam Joint Stock Corporation (67%), Total BuildingSystems Ltd (97%) and VRC Weldmesh (Vietnam) Ltd (100%).
A pro forma balance sheet showing the effect of the sale on the company is annexed to this announcement.
The Company is investigating other opportunities to enhance shareholder value.
Notice of Meeting and supporting explanatory documentation will be circulated to the Company's shareholders shortly.
The Company is advised on this transaction by Asian Capital Partners
