A German-based company has agreed to invest over $11 million in metal recycling group CMA Corporation and provide expansion opportunities.
A German-based company has agreed to invest over $11 million in metal recycling group CMA Corporation and provide expansion opportunities.
Scholz will subscribe to 45 million shares at 25 cents, valued at $11.25 million, a premium to CMA's last traded price of 24c at 13:28 AEDT.
Both companies have also signed a letter of intent to enter a long-term strategic partnership that will also provide CMA with assistance in the development of its Meretec technology throughout Europe and the United States.
The Meretec technology galvanises steel, removing and recovering the zinc coating from the metal to produce clean black steel and high grade zinc particulate.
CMA acquired the technology through its acquisition of UK-based Meretec Ltd earlier this year.
Last week, CMA announced it had rejected a takeover proposal from Transpacific Industries Group valued at $97 million.
CMA has strong links to WA through the involvement of Rob Moltoni, whose demolition and scrap business was merged with Melbourne-based Adams brothers to form Moltoni Adams in 2001, with CMA established in March 2005 through the merger of scrap metals trader T&T Group and Moltoni Adams.
Today's CMA announcement is pasted below:
Metal recycling group CMA Corporation pleased to announce that global scrap metal recycler and trader Scholz has entered into an agreement to invest $11.25 million in the Company through a Placement.
The German-based Scholz will acquire 45 million shares at 25 cents per share, representing a premium of 25% to the closing share price on 4 November 2008.
In addition to the Placement, Scholz has signed a letter of intent to enter a long-term strategic partnership with CMA identifying the following benefits:
1. Expansion Opportunities: Scholz's global reach will provide CMA with a number of expansion opportunities through a shared platform and network;
2. Complementary Geographic Footprint: CMA's broad network of operations throughout Australia, New Zealand, Asia and the US complement the Scholz global footprint;
3. Commercial roll-out of Meretec technology: Scholz will assist in the development and establishment of CMA's recently acquired Meretec technology throughout Europe and the United States.
The Scholz Placement will be undertaken after CMA's forthcoming Annual General Meeting on 24 November 2008.
CMA Managing Director Doug Rowe said the Company was delighted to welcome Scholz to the register.
"Scholz is one of the world's largest scrap companies with operations throughout Europe, US, Mexico and China and is an extremely prestigious company for us to be aligned with," said Mr Rowe.
"In addition, we believe the premium Scholz has paid is a reflection of its confidence in CMA's business model and our potential for growth."
The agreement with Scholz is in line with CMA's strategy to pursue joint venture agreements and strategic partnerships that provide access to new markets and which have the potential to add significant value to the Company.
