Sims Metal Management Announces the Sale of Its Scrap Metal Recycling Assets in Arizona, USA
December 02 2012 - 6:22PM
Business Wire
Sims Metal Management Limited (SimsMM) (ASX: SGM) (NYSE: SMS),
the world’s largest listed metal and electronic recycling company,
today announced the sale, effective 30 November 2012, of its
Arizona scrap metal recycling assets to SA Recycling LLC (SAR). SAR
is a joint venture owned equally by SimsMM and Adams Steel, and has
operations in California, Nevada and Arizona.
The sale was settled at a price of US$35 million in cash. The
sale principally involves the real property related assets for two
scrap metal recycling facilities located in Phoenix and Tucson,
Arizona. SimsMM will retain the working capital assets of the
Arizona business which is anticipated to monetize a further circa
US$15 million in cash over 45 days following the sale. This brings
the total expected cash generation from the Arizona sale to US$50
million. The transaction will be accounted for in the first half
Fiscal 2013 results with an expected pre-tax loss of A$12 million.
The loss on sale relates to the value of intangible assets not
realised in the sale.
Daniel W. Dienst, Group Chief Executive Officer of SimsMM
stated, “The sale of our Arizona assets, following on the heels of
our recent dispositions of our Colorado assets, our joint venture
interest in Nashville and the acquisitions of assets and businesses
in Alabama and Maryland over the past few months, is part of our
aggressive repositioning of our shareholders’ precious capital to
markets that offer the highest returns on invested capital and meet
the long term strategic growth plans we have for the important
North American market. The transaction also resolves issues related
to the SAR joint venture agreement which granted Arizona as a
territory to SAR, allowing us to operate, but to not otherwise
expand in Arizona. We are pleased to have resolved this issue,
while at the same time allowing our important joint venture partner
in the Southwestern U.S. to expand. In this transaction we will
retain an interest in the profit and cash flow of the Arizona
business through our 50% ownership in SAR.”
George Adams, Chief Executive Officer of SAR added, “This is an
exciting growth opportunity for SAR and fits perfectly into our
Southwestern U.S. footprint. The deal enables SAR to expand the
reach of its Southern California base further into Arizona, and
aligns our existing Arizona facility as a feeder yard to the
shredder we acquired in this transaction. The transaction also
allows the acquired facilities to realise freight efficiencies and
better access to export markets through our docks in Southern
California. We welcome the new Arizona employees to the SAR
family.”
Cautionary Statements Regarding Forward-Looking
Information
This release may contain forward-looking statements, including
statements about Sims Metal Management’s financial condition,
results of operations, earnings outlook and prospects.
Forward-looking statements are typically identified by words such
as “plan,” “believe,” “expect,” “anticipate,” “intend,” “outlook,”
“estimate,” “forecast,” “project” and other similar words and
expressions.
These forward-looking statements involve certain risks and
uncertainties. Our ability to predict results or the actual effects
of our plans and strategies is subject to inherent uncertainty.
Factors that may cause actual results or earnings to differ
materially from these forward-looking statements include those
discussed and identified in filings we make with the Australian
Securities Exchange and the United States Securities and Exchange
Commission (“SEC”), including the risk factors described in the
Company’s Annual Report on Form 20-F, which we filed with the SEC
on 12 October 2012.
Because these forward-looking statements are subject to
assumptions and uncertainties, actual results may differ materially
from those expressed or implied by these forward-looking
statements. You are cautioned not to place undue reliance on these
statements, which speak only as of the date of this release.
All subsequent written and oral forward-looking statements
concerning the matters addressed in this release and attributable
to us or any person acting on our behalf are expressly qualified in
their entirety by the cautionary statements contained or referred
to in this release. Except to the extent required by applicable law
or regulation, we undertake no obligation to update these
forward-looking statements to reflect events or circumstances after
the date of this release.
All references to currencies, unless otherwise stated, reflect
measures in Australian dollars.
About Sims Metal Management
Sims Metal Management is the world’s largest listed metal
recycler with approximately 270 facilities and 6,600 employees
globally. Sims’ core businesses are metal recycling and electronics
recycling. Sims Metal Management generated approximately 88 percent
of its revenue from operations in North America, the United
Kingdom, Continental Europe, New Zealand and Asia in Fiscal 2012.
The Company’s ordinary shares are listed on the Australian
Securities Exchange (ASX: SGM) and its ADRs are listed on the New
York Stock Exchange (NYSE: SMS). Please visit our website
(www.simsmm.com) for more information on the Company and recent
developments.
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