Thailand's Sahaviriya Steel to raise $1 billion for Corus Teesside Cast Products
28 Dec 2010
Sahaviriya Steel Industries (SSI), Thailand's largest hot-rolled steel producer is planning to raise $1 billion to finance the acquisition and development of Teesside Cast Products (TCP) unit in the UK of Tata Steel Europe.
SSI will raise about 6 billion baht ($200 million) in a rights issue subject to endorsement from a shareholders' meeting on 25 January 2010.
The steelmaker will offer 2.62 billion shares to existing shareholders at 1.40 baht a share at a ratio of five existing shares for each new share. It would offer another 2.62 billion shares in a private placement at 1.20 baht a share.
The company expects the fund raising and the acquisition to be completed in the first quarter of 2011.
The UK unit of Corus, now re-branded as Tata Steel Europe had in August 2010 signed a memorandum of understanding (MoU) with SSI for the sale of TCP unit in north-east England, which includes coke ovens, power generation facilities, sinter plant, blast furnace and steelmaking facilities, for $500 million. (See: Corus plans to sell Teesside unit to Thailand's SSI for $500 million)
Sahaviriya Steel Industries UK, a wholly owned subsidiary of the Thai steel maker, will raise $650 million in loans in the UK, while the remaining $350 million would be funded as equity from the share sale and loans taken in Thailand.