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Johannesburg - Highveld Steel and Vanadium, South Africa's second-largest steel producer, has announced the completion of the sale of its Rand Carbide division to Silicon Smelters, a
subsidiary of FerroAtlantica, for R300m.
The company said in a statement to the JSE that all conditions precedent had been met and the transaction had been concluded, but would only be effective from February 2008.
Highveld, which is now controlled by Russian steel maker Evraz, said the division was being sold because the company's board considered it as non-core.
Rand Carbide, which was acquired by Highveld in 1978, produces
ferrosilicon, electrically calcined anthracite and char.
Cleaning up assets
Products are currently sold to third-party customers in South Africa and internationally as well as to divisions of Highveld.
The company was cleaning up its asset base in the wake of the R4.9bn merger with Evraz.
It has also been forced to sell certain vanadium assets as part of the conditions imposed by the European Commission.
Europe's competition regulatory body said in February last year that the transaction would give rise to competition concerns at all levels of the vanadium chain, and that certain vertically integrated vanadium assets had to be sold.
Deal approved on conditions
While the commission had originally set a deadline of November 20 for the sale, this was extended to January 20.
South Africa's Competition Tribunal also approved the merger in April on condition that Evraz sold off a stake in Highveld Steel's iron ore and vanadium mine, Mapochs, and its Vanchem plants.
Evraz reportedly received some 20 bids for Vanchem and another five for Rand Carbide.
Greater focus on steel
In August last year the company said the non-core disposals as well as the forced divestiture had material implications for the company's future strategy and capital expenditure plans.
Evraz was expected to place a far more strategic emphasis on the steel side of the business.
At 13:47 shares in Highveld were trading 78c firmer at 9 800c rand on the JSE.
- I-Net Bridge