IMCO Recycling Pays Redemption Liability for German Subsidiary, Acquires Full Ownership of Mexican Subsidiary
IRVING, Texas, Jan. 8, 2004 -- IMCO Recycling Inc. today announced that its German subsidiary, VAW-IMCO Guss und Recycling GmbH ("VAW-IMCO"), has prepaid in full the redemption liability for the shares in VAW-IMCO owned by Hydro Aluminium Deutschland GmbH ("Hydro").
IMCO Recycling announced in March that it had acquired effective voting control of VAW-IMCO and that, effective March 1, 2003, the subsidiary's accounts would be consolidated into its financial statements.
VAW-IMCO operates aluminum recycling and foundry alloy facilities in Grevenbroich and Toging that are major suppliers to the European auto industry and other large aluminum markets.
In addition, the company said VAW-IMCO has acquired from Hydro an aluminum recycling furnace and related assets and real estate located at and adjacent to a VAW-IMCO facility. The furnace will continue to be used to process material for Hydro under a long-term contract.
The company funded VAW-IMCO's redemption payment using a portion of the proceeds from its October 2003 issuance of senior secured notes due 2010.
The company also said it has acquired full ownership of a Mexican subsidiary in which it previously held an 85 percent interest. The subsidiary's plant is located in Monterrey and recycles aluminum dross and scrap for NEMAK, S.A. under a long-term contract.
This facility was built in 2002 and utilizes proprietary recycling furnaces redeployed from the company's U.S. operations. It is located near the NEMAK plant which is the largest cylinder head and engine block casting facility in the Western hemisphere.
Don V. Ingram, IMCO Recycling's chairman and chief executive officer, said: "We are pleased to complete these transactions because they will strengthen our leadership role in the world aluminum recycling and specialty alloys industry. VAW-IMCO increased its capacity, productivity and processing volume in 2003, and payment of the redemption liability gives us greater financial flexibility to pursue European growth opportunities. Full ownership of our Mexican subsidiary, which also raised its volume in 2003 and began performing additional services for NEMAK, increases our participation in the growing Mexican auto industry. It also effectively positions IMCO for growth opportunities created by the North American Free Trade Agreement (NAFTA)."
IMCO Recycling Inc. is one of the world's largest recyclers of aluminum and zinc. The company has 22 U.S. production plants and five international facilities located in Brazil, Germany, Mexico and Wales. IMCO Recycling's headquarters office is in Irving, Texas.
SAFE HARBOR REGARDING FORWARD-LOOKING STATEMENTS
Forward-looking statements made in this news release are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include statements regarding the company's future role in the world aluminum recycling and specialty alloys industry and expected European and Mexican growth opportunities. Investors are cautioned that all forward-looking statements involve risks and uncertainties, and that actual results could differ materially from those described therein. These risks and uncertainties would include, without limitation, a continuation of weak demand from worldwide economic conditions; risks related to the price of aluminum and zinc on world and U.S. markets; the ability of the company to enter into effective metals and other commodity derivatives; currency exchange fluctuations; future downturns in automotive markets and other risks listed in the company's filings with the Securities and Exchange Commission, including but not limited to the "Management's Discussion and Analysis" sections of the reports on Form 10-K for the fiscal year ended December 31, 2002 and Form 10-Q for the quarter ended September 30, 2003.
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