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RHI Sells Production Sites in Italy and Spain to Unnamed European Refractories Supplier

Published: September 8, 2017; 17:51 · (FriedlNews)

The planned combination of RHI AG with the Brazilian Magnesita was approved by the European Commission on June 28, 2017 subject to conditions. Today, RHI signed a contract with a European refractories supplier regarding the sale of its dolomite business in the European Economic Area. The sale consists of the production sites in Marone, Italy, and Lugones, Spain. The contribution to revenue of the two RHI plants amounted to roughly EUR 50 million in the financial year 2016 and represents roughly 3% of the Group's revenue in the year 2016.

RHI Sells Production Sites in Italy and Spain to Unnamed European Refractories Supplier / Picture: © RHI AG

The planned combination of RHI AG with the Brazilian Magnesita was approved by the European Commission on June 28, 2017 subject to conditions.

Today, RHI signed a contract with a European refractories supplier regarding the sale of its dolomite business in the European Economic Area.

The sale consists of the production sites in Marone, Italy, and Lugones, Spain. The contribution to revenue of the two RHI plants amounted to roughly EUR 50 million in the financial year 2016 and represents roughly 3% of the Group's revenue in the year 2016.

For the closing of the transaction, the European Commission has to confirm the buyer.

Resulting from the transaction, a positive contribution to earnings in the medium single-digit millions is expected in the fourth quarter of 2017.

"With the sale of the two sites, the combination of RHI AG with Magnesita is also still right on schedule", commented CEO Stefan Borgas. "We expect the confirmation by the European Commission in the near future."

In late August, a contract was also signed to sell the production sits in San Vito, Italy, and Sherbinska, Russia.

With the closing of the transaction, which is expected for the third quarter of 2017, the RHI Group divests the production of fused cast refractories for the use in the glass industry, which is associated with high fixed costs. Revenue that was generated with products manufactured at the two plants amounted to roughly EUR 26 million in 2016. The measurement of the disposal group based on the purchase price offer led to an impairment of EUR 1.7 million in the second quarter of 2017.

In the first half of 2017, production at the site in Aken, Germany, was stopped for an indefinite period. The Management Board intends to sell or close the plant in order to ensure capacity utilization of the production network. The inactive assets were impaired by EUR 5.5 million as of June 30, 2017.

"The global network optimization of RHI is progressing. As planned, we are implementing the individual measures and also optimize our positioning geographically in every way", Borgas emphasizes.