16 April 2013
Nyrstar today announced that it has reached a negotiated settlement with Glencore International AG ("Glencore") in relation to its Commodity Grade Off-take Agreement (the "Off-Take Agreement") for the sale and marketing of commodity grade zinc metal produced by Nyrstar within the European Union, and Glencore's 7.79% shareholding in Nyrstar. This follows the requirement for Glencore to end these aspects of its relationship with Nyrstar as part of the remedy package agreed by the European Commission in relation to Glencore's proposed merger with Xstrata Plc ("Xstrata").
Summarised, under the terms of the settlement the following has been agreed:
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By 31 December 2013 Nyrstar will cease to sell to Glencore commodity grade zinc metal produced at Nyrstar's smelters located within the European Union (Auby, Balen/Overpelt and Budel).
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With respect to the above, Glencore has agreed to pay Nyrstar a termination fee of EUR 44.9 million.
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The sale of commodity grade zinc and lead produced from Nyrstar's smelters outside of the European Union (Clarksville, Hobart and Port Pirie) will continue as before under the Off-take Agreement..
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Nyrstar has agreed to acquire Glencore's entire shareholding of 7.79% of common shares for EUR 3.39 per share (a discount of approximately 10% to the 5-day volume weighted average price, and 5% to the closing share price, of Nyrstar shares on 15 April 2013), for a total cash consideration of EUR 44.9 million.
Nyrstar will hold the acquired shares as treasury stock and will look to place the shares with suitable investors over time.
The above settlement will become final upon the successful completion of Glencore's merger with Xstrata, which is expected to be in approximately two weeks.
Nyrstar is in the process of determining the most suitable channel(s) to market and sell the commodity grade zinc metal produced at its European smelters. Options available to Nyrstar include bringing the marketing and sales of this volume in-house, tendering this volume to third parties or entering into partnering arrangements, with numerous enquiries having been made on the availability of this metal over the past months. Nyrstar will provide an update on the outcome of this process in due course.
Commenting on the settlement, Roland Junck, Nyrstar's Chief Executive Officer said,
"The settlement reached between Nyrstar and Glencore represents a positive outcome for both parties. Nyrstar has been adequately compensated for the amendment to its Commodity Grade Off-take Agreement and at the same time has been able to secure Glencore's shareholding, which will allow us to place those shares with suitable investors over a timeframe which Nyrstar will determine. We will continue to have a commercial relationship with Glencore through the sale of our commodity grade zinc and lead from our non-European smelters and through the sale of concentrates between the two companies.
We are reviewing the options available to us with respect to the marketing and sale of the commodity grade zinc metal produced at our European smelters. We have entered into discussions with a number of interested parties to potentially tender the volume or enter into partnering arrangements. We are also reassessing the value of bringing this function back in-house as the volume also provides a unique opportunity for us to create further value by leveraging our commercial acumen, market insight and scale."
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About Nyrstar
Nyrstar is an integrated mining and metals business, with market leading positions in zinc and lead, and growing positions in other base and precious metals; essential resources that are fuelling the rapid urbanisation and industrialisation of our changing world. Nyrstar has mining, smelting, and other operations located in Europe, the Americas, China and Australia and employs over 7,000 people. Nyrstar is incorporated in Belgium and has its corporate office in Switzerland. Nyrstar is listed on NYSE Euronext Brussels under the symbol NYR. For further information please visit the Nyrstar website, www.nyrstar.com
For further information contact:
Jaideep Thatai Manager Investor Relations T: +41 44 745 8103 M: +41 79 722 3089 jaideep.thatai@nyrstar.com
Sheela Pawar de Groot Group Manager Corporate Communications T: +41 44 745 8154 M: +41 79 722 6917 sheela.pawar@nyrstar.com
Geert Lambrechts Manager Corporate Communications T: +32 14 449 646 M: +32 473 637 892 geert.lambrechts@nyrstar.com
The full press release can be downloaded from the following link: