Comalco Ponders Sale Of Us Offshoot
The Age
Wednesday February 15, 1995
Comalco said yesterday it would make a decision early next month on whether to proceed with the $350 million sale of its United States offshoot, Commonwealth Aluminum Corp (CAC).
The CRA subsidary flagged the sale, through a public offering in the North American markets, before Christmas and has now released a preliminary prospectus.
CAC owns a rolling mill at Lewisport, Kentucky, which has come storming back in to profits after heavy losses caused by weak aluminium prices and stiff competition.
CAC posted net losses in three of the last years but net income for 1994 was $US22.1 million. ($A29 million) Industry analysts believe there is no doubt that Comalco will proceed with the sale, which fits Comalco's 1992 strategy to concentrate on the upstream end of the aluminium business bauxite mining, alumina refining and aluminium smelting.
Initial soundings indicate Comalco has found a more than willing market for the CAC stock on offer.
Under the prospectus, 10 million shares in CAC will be offered at between $US19 and $US21 a share. Before the offer closes, CAC will also borrow $US50 million which it will pass to Comalco.
CAC's total shareholders' equity at 31 December was $US242.69 million, indicating Comalco will emerge from the sale sporting a small profit.
© 1995 The Age
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