19.12.2005: In line with its stated strategy regarding the restructuring of its silicon metal operations, Elkem has entered into an agreement to sell the silicon plant in Alloy West Virginia to Globe Metallurgical.
At the same time, an agreement was signed for an option to sell the appurtenant hydropower plant to the D.E. Shaw investment fund. These agreements will give a total proceeds for Elkem of approximately USD 130 million.
Implementation of the sales is expected to be concluded during the first half of 2006. The transaction will result in a pre-tax accounting gain for Elkem, but in connection with Orkla's acquisition of Elkem, however, Orkla will ascribe excess value to fixed assets, and therefore no accounting gain will be recognised in Orkla's consolidated accounts in connection with these sales.
The silicon metal plant has an annual capacity of approximately 70,000 tonnes. In 2004, operating revenues and operating profit (EBITA) for the businesses covered by the agreement totalled USD 96 million and USD 6 million respectively. The silicon metal plant has a total energy requirement of around 900 - 1000 GwH.
The hydropower plant is a run of the river power plant and is regulated by a time-limited licence (2017). The licence conditions are linked in part to the operation of the silicon plant. The power plant has a normal annual capacity of just over 500 GWh.