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Iran Eyes Sale of remaining 4.5% stake in steel group
ThyssenKrupp
2004 June 12
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Iran is considering selling its remaining 4.5% stake in German engineering and steel group ThyssenKrupp AG and has
sounded out investment banks about arranging the sale, banking sources said on Friday.
The 23.17 million shares, the legacy of a 1974 investment Iran made in the steelmaker, are worth about 390 million euros ($467.5 million) at current prices.
Banking sources said that Iran discussed a possible sale with investment banks earlier this week and that major Wall Street players would not seek the mandate because of U.S. government accusations that Iran sponsors terrorism.
The sources said it was not clear whether a mandate had yet been awarded and there was no indication when a sale of the shares would take place nor in what form. One source said Deutsche Bank was a leading contender for the deal.
Deutsche declined to comment as did ThyssenKrupp, the Duesseldorf-based conglomerate created from the 1999 merger between Thyssen and Krupp.
ThyssenKrupp shares extended earlier losses to close 1.33% lower at 13.40 euros per share, underperforming the blue-chip DAX, which shed 0.2%.
The stock has fallen 14% so far this year, trailing a narrowly firmer DAX index, but has gained 41% since May 2003, when ThyssenKrupp paid three times market prices to buy back almost 17 million shares from Iran.
The world's biggest producer of stainless steel paid 406 million euros then, or around 24 euros per share, after the United States warned that it would be placed on a "black list" unless Iran reduced its stake.
INFLUENCE
That transaction reduced Iran's stake in ThyssenKrupp to 4.5% from 7.8%, but the state has retained influence over the company through the presence on its supervisory board of Iranian government minister Mohamad-Mehdi Navab-Motlagh.
A complete exit by Iran would come as ThyssenKrupp finalizes the purchase of submarine manufacturer HDW, a deal that will make it Europe's largest naval shipbuilder.
ThyssenKrupp's shares have been undermined this year by disappointing earnings growth due to rising raw material costs. It posted second quarter pre-tax profit of 249 million euros last month, against analysts' average expectations of 288 million, as the soaring cost of nickel, chromium and scrap slashed margins at its stainless unit.
The group has, however, repeated that it expects one billion euros in pre-tax profit before disposal gains in the fiscal year to September. It is plowing on with a program to sell 33 non-core businesses to cut debt and sharpen the group's focus.
It aims to reduce debt to below four billion euros by the end of September from 4.28 billion at the end of March.
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Private Sector Steel Production to Hit 1.5m Tons
2004 June 1
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The secretary of the Association of Iranian Steel Producers announced that during the current year (March 20, 2004-March 19, 2005) the volume of private sector steel production will increase by 600,000 tons easing at 1.5 million tons by the end of Iranian year 1383.
According to Seyyed Rasul Khalifeh Soltan in a press conference that the private sector currently meets 28% of the overall domestic demand in beam and iron rods with the remaining 72% of the national requirement being met through imports or by state-run steel companies.
He put the volume of steel bar imports at 1.8 million tons the past Iranian year, of which some one million tons were used in state-run factories and the remainder utilized by the private sector.
Pointing to the resolve of officials to decrease iron rod tariffs by 5% in the current Iranian year, he said that this decision would certainly bring about supply and demand variations in the steel market.
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NISCO awards Rs 70-cr contract to HEG Ltd
2004 May 30
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HEG Ltd today said it has bagged a Rs 70-crore contract from Iran's largest
steel manufacturer National Iron and Steel Co (NISCO) to provide technical
assistance and know-how for setting up a graphite electrode manufacturing plant
in the Yazd province. HEG won, as part of a five-member international
consortium, the contract to give technical assistance to NISCO following a
global tender, it said in a statement here. The other four participants are
IRITEC of Iran, which will build the plant, IRASCO (Italy) which will be
responsible for project financing and equipment procurement, Iran's ITOK to act
as consultant for NISCO and Germany's SCS, which will be sub-consultant to ITOK.
A consideration of 15 million dollars will be paid to HEG over a four-year
period till the plant is commissioned, it said. The 11 billion-dollar plant will
be operated by state-owned NISCO at Ardakan in Yazd province and have a capacity
of 30,000 MTPA of UHP grade electrodes. It will cater to steel manufacturing
plants in Iran and one plant in Qatar which is partly owned by NISCO.
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Import Tariffs on Beams and Iron Sheets Declined
2004 May 25
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In order to meet the demand of domestic markets and facilitate further import of
iron, tariffs on beam imports decreased by 5%. The general director of
commercial products supply and distribution at the Commerce Ministry Hossein
Modarresi Khiabani said that the tariff rates on beams decreased from 10% to 5%
and iron sheet tariffs also eased to 10% declining by 5%. Khiabani stressed that
the reduction of overall import expenses was another objective of decreasing
beam and iron sheet tariff rates. He further explained the reduction in steel
import tariffs does not harm domestic steel producers because of the secure
profit margin that the domestic beam and iron sheet producers have. A decline in
import tariffs has little impact on domestic steel producers in the beam and
iron sheet sector. However, the decrease in tariffs does not pertain to iron
rods. To maintain a secure profit margin for domestic steel rod producers, the
tariff charged on iron rod import is higher than other steel products and
currently stands at 15 percent.
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Imam Khomeini Port’s Special Steel Pier inaugurated
2004 May 25
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By the end of the Fourth Five-Year Development Plan, 22 million tons of steel
will be produced in Iran, said Minister of the Mines and Industries Is’haq
Jahangiri. Speaking at the inauguration ceremony of Imam Khomeini Port’s
Special Steel Pier, Jahangiri also noted that availability of the railway
transportation and a considerable volume of the detected mines including the
recently detected mine containing two billion tons of iron ore are parts of the
steel development infrastructure in the country. “Currently, still production
capacity of the country is 4.7 million tons; however, the volume is expected to
reach 22 million tons by the end of the Fourth Five-Year Development Plan,”
added Jahangiri. Imam Khomeini Port’s Special steel pier was inaugurated by
President Seyyed Mohammad Khatami on Monday.
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