2008-10-08



October 8, 2008 - Bekaert further consolidates activities in Latin America

Bekaert establishes regional holding with partner

Today, Bekaert signed a memorandum of understanding with its partners in Ecuador, to establish a holding company covering the businesses in the northern part of Latin America.  Bekaert will become the principal shareholder in this holding company.
 
Bekaert and its Ecuadorean partners [1] , represented by members of the Kohn family, intend to merge their interests in:

  • Vicson, S.A. in Venezuela (currently 100% owned by Bekaert);
  • Productora de Alambres Colombianos Proalco S.A. (Proalco) in Colombia (currently 87.5% shareholding by Bekaert and 12.5% by the Partner);
  • Ideal Alambrec S.A. in Ecuador (currently a 50/50 joint venture between Bekaert and the Partner);
  • Productos de Acero Cassadó S.A. (Prodac) in Peru (currently a 39.9% investment held 50/50 by Bekaert [2] and the Partner).

The merger will be effected by the establishment of a holding company in which the parties agreed that 80% of the shares involved will be held by Bekaert and the remaining 20% by the Partner.

Until now, Bekaert accounted for the Ideal Alambrec and Prodac joint ventures using the equity method.  As from 2009, these companies will become subsidiaries and therefore will be fully consolidated by Bekaert. Simulated on the basis of the 2007 financial statements, the Group's consolidated figures would be impacted as follows:

-        Increase of consolidated sales by € 140 million;
-        Increase of the result for the period by € 3.5 million;
-        Decrease of the share in the results of joint ventures and associates by € 2.9 million;
-        Increase of the result for the period attributable to minority interests by € 2.1 million;
-        Decrease of the investments accounted for using the equity method in the balance sheet by € 13.4 million;
-        Increase of the net debt by € 25.8 million.

As a consequence of the interest reduction to 80% in Vicson and Proalco, the Bekaert result for the period attributable to minority interests would additionally increase by € 2.4 million.

Bekaert and the Partner anticipate closing the transaction by early 2009.  

Tomas Kohn Topfer, Chairman of the Board of Directors of Ideal Alambrec, commented: “We have come to an agreement with Bekaert, our partner for over 35 years, to manage all the wire operations in the related region by means of a holding entity which will provide more opportunities, efficiency and flexibility in our companies, as well as a stronger platform for future growth.”

Bert De Graeve, Chief Executive Officer of Bekaert, stated: “Latin America is for Bekaert a growth market which is in full development. This agreement allows us to strengthen our strategic positions and to join the common interests of our operations in the region.”

Henri-Jean Velge, Group Executive Vice President of Bekaert, commented: “Bekaert will fully support the local management teams pursuing the business strategy and approach of the Group.  In line with our tradition, Bekaert will be sustaining the entities' local identity and best practices while maintaining excellent relationships and cooperation with the Kohn family, the customers, and all other stakeholders.”

[1]    Hereafter named "the Partner"

[2]    Note on Prodac: in combination with its additional interest of 20% via a Chilean joint venture, Bekaert hereby will acquire a controlling interest of 51.9% in Prodac (Peru).  The other main shareholders in Prodac are Bekaert's partners in Chile and in Peru, each holding about 20%.

Download press release to read more 

We use cookies in order to let you fully experience this website. Cookies are small files we put in your browser to mainly track usage or remember your settings of our site but they don’t tell us who you are. Want to know more about how we use these Cookies please read our Cookie policy and Data privacy policy.
Close