Finland-based stainless steel producer Outokumpu has announced that it plans to divest its Italian steel plant Terni (Acciai Speciali Terni) and its high performance alloy unit VDM. Outokumpu has signed a binding agreement with ThyssenKrupp according to which Outokumpu will sell the Terni remedy assets and the VDM business to ThyssenKrupp for a loan note worth €1.27 billion.
According to Outokumpu, the divestment of Terni aims to address the remedy requirements of the European Commission. The transaction includes the stainless steel mill in Terni, Italy and all related legal entities as well as Outokumpu service centers in Germany, Spain, Turkey and France.
Outokumpu is also seeking to raise €650 million through a rights issue after the closing of the transaction with ThyssenKrupp. The company stated that it has arranged a new syndicated loan facility of €500 million with a maturity of three years.
With the divestment of Terni, Outokumpu will fulfill European Commission's conditions for the Inoxum transaction. In late 2012, Outokumpu acquired Inoxum, the stainless steel unit of ThyssenKrupp.
