Plc and N.V. announce that they have today agreed to sell OKK Koksovny, a.s. (a wholly owned subsidiary of (27,5 CZK, -5,50%) NV) (‘OKK’) to the METALIMEX group.
On 16 May 2013, announced its intention to divest its coke subsidiary, OKK. This decision was part of a wider operational review undertaken by with the aim of adjusting NWR's business in light of the challenging market conditions. The Executive Chairman of , Gareth Penny, said: “The Directors of believe that the disposal of OKK is an important step towards becoming a more efficient, leaner and more flexible mining business.”
The consideration for the Disposal is EUR 95 million and consists of EUR 70 million for the transfer of NV’s entire shareholding in OKK to MTX Koksovny a.s. and EUR 25 million for the sale of certain of OKK’s coke inventory to METALIMEX a. s. NV will receive EUR 88 million on completion. The remaining EUR 7 million will be paid on completion into an escrow account. The funds will be released to NV from the escrow account three (3) months after completion, subject to the satisfaction of any claims under the sale and purchase agreement.
"We perceive this news positively as the selling price of 70 mln. EUR is according to our expectations but most probably above a market consensus," Tomas Sykora, Patria Direct analyst, said. "The price refers to almost 6x normalized EBITDA which is in-line with sector standards. NWR is to receive 88 mln. EUR (7 mln. EUR into enscrow account) on completition date which is DEC-13 at latest. Such an amount will strenghten NWR’s current cash balance of 176 mln. EUR and should help in financing of the NWR’s „quarterly cash-deficits“ in 3-4 additional quarters based on 2Q13 and our estimates."
The Company does not expect any taxation liability attributable to the Company following the proposed Disposal. Therefore, the Company will receive the entire purchase price (subject to deduction of transaction expenses of approximately EUR 2 million and to any potential adjustments made to the funds in the escrow).
The Company intends to reinvest the net proceeds in its core business over the twelve (12) months following completion.
Conditions of the Disposal
The Disposal is conditional on certain conditions including:
1. the approval of shareholders which will be sought at a general meeting;
2. the approval of relevant competition authorities and applicable regulators;
3. the approval of the lenders under the EUR 100 million Revolving Facility
A longstop date of 13 December 2013 has been agreed whereby if the conditions have not been met the parties to the transaction agreements may not need to complete the transaction.
OKK Koksovny, a.s.
The OKK business is a separate business segment within the Group, with an independent management and workforce. It operates a coking plant at the Svoboda facility that has a capacity of approximately 850 thousand tonnes per year.
As at 31 December 2012, the gross assets attributed to OKK in the balance sheet of the Company was EUR 223 million. The loss before tax attributable to OKK for the latest audited financial year ended 31 December 2012 was EUR 3 million.
OKK key employees
Michal Kuca is a key individual of the management team at OKK and will continue in his role at OKK following the Disposal. Change in the reporting date of NWR’s Q3 2013 financial results The Q3 2013 financial results will be published on 6 November 2013.