Aug 24 2006
Hydro has acquired a majority position in the Slovakian aluminium company Slovalco. The investment confirms the long-standing relations between Hydro and Slovalco and the important role Slovalco plays for Hydro.
Based on an agreement from 2001, Hydro has had an option to increase its shareholding in Slovalco, owned by the European Bank for Reconstruction and Development, EBRD. The transaction will increase Hydro’s ownership interest in Slovalco to 55.3 percent, and reduce EBRD’s ownership interest to 10 percent. The Slovakian company ZSNP holds the remaining 34.7 percent.
Hydro and the EBRD have been partners in Slovalco since 1994, when they each purchased 10 percent of the shares in Slovalco. The company was established to complete and operate the state-of-the-art primary aluminium plant in Ziar nad Hronom, Slovakia. In 2001, EBRD increased its holding to 45.3 percent and Hydro its holding to 20 percent.
Based on the agreement from 2001, Hydro will pay USD 28 million for the shares taken over from EBRD.
Slovalco has a primary aluminium production of 160,000 tonnes per year, after a successful expansion in 2004. In 2005 sales of the aluminium casthouse products extrusion ingots and foundry alloys reached 177,000 tonnes, mainly sold through Hydro’s marketing network in Europe. Slovalco reported a net income after tax of USD 44.2 million in 2005 and had a turnover of USD 354 million. Slovalco has 615 employees.
Sovalco has been consolidated in Hydro’s financial statements since 2004 in accordance with accounting regulations and the 2001 option agreement.