Amsterdam, 10 August 2010 — AMG Advanced Metallurgical Group N.V.’s (“AMG”, EURONEXT AMSTERDAM: “AMG”) publicly listed affiliate, Timminco Limited (“Timminco”) (TSX:TIM) announced today that it has agreed to form a joint venture with Dow Corning Corporation (“Dow Corning”) at its silicon metal production facilities in Bécancour, Québec. Dow Corning will acquire a 49% equity interest in a new joint venture entity (the “Joint Venture”) that will own the existing silicon metal operations of Timminco’s wholly-owned subsidiary, Bécancour Silicon Inc. (“BSI”). In exchange, BSI will receive net cash proceeds of $39.7 million on closing, and up to potentially an additional $10.0 million after closing subject to achieving certain performance objectives relating to production cost and capacity improvements. BSI will retain a 51% equity stake in the Joint Venture.
All of the production output of the Joint Venture, which will be based on an initial annual production capacity of 47,000 mt of silicon metal, will be split between BSI and Dow Corning proportional to their ownership interests. All of BSI’s solar grade silicon purification operations and facilities at the Bécancour site will remain with BSI.
“This joint venture with Dow Corning builds on a long and successful relationship between the two companies and strengthens Timminco’s position for future growth opportunities,” said Dr. Heinz C. Schimmelbusch, Timminco’s Chairman of the Board and Chief Executive Officer.
“This acquisition is well aligned with Dow Corning’s global strategy of securing an efficient supply of this critical raw material used to manufacture all of our silicon-based products,” said Robert Hansen, Dow Corning’s executive vice president and general manager of Core Products.
The Joint Venture, which will be known as “Québec Silicon”, will acquire from BSI all of the silicon metal production assets, including property, plant, equipment, and certain net working capital items, and BSI’s quartz mining lease in Lac Malbaie, Québec. BSI will retain its silicon metal customer relationships, and honour all existing contracts with such customers, through BSI’s proportional off-take of the Joint Venture’s production.
All active employees associated with the silicon metal operations will be transferred to the Joint Venture, which will assume certain liabilities associated with such employees, including pension obligations. The transferring employees include a majority of BSI’s existing management team, which will continue to manage and operate the silicon metal operations.
The creation of the Joint Venture and the closing of Dow Corning’s acquisition of its 49% equity interest are expected to occur on or about September 30, 2010. The closing is subject to satisfaction of customary closing conditions, including regulatory approvals and consent of BSI’s lenders. In the event the conditions are not fulfilled and the transactions do not proceed, BSI and Dow Corning have committed to alternative supply arrangements for 20,000 metric tons of silicon metal to be delivered in 2011.
AMG creates and applies innovative metallurgical solutions to the global trend of sustainable development of natural resources and CO2 reduction. AMG produces highly engineered specialty metal products and advanced vacuum furnace systems for the Energy, Aerospace, Infrastructure and Specialty Metals and Chemicals end markets. AMG consists of two operating divisions, Advanced Materials and Engineering Systems, and owns interests in publicly-listed companies Graphit Kropfmühl AG (Deutsche Börse: GKR.DE) and Timminco Limited (TSX: “TIM”).
The Advanced Materials Division develops and produces specialty metals, alloys and high performance materials. AMG is a significant producer of specialty metals, such as ferrovanadium, ferronickel-molybdenum, aluminum master alloys and additives, chromium metal and ferrotitanium, for Energy, Aerospace, Infrastructure and Specialty Metal and Chemicals applications. Other key products include specialty alloys for titanium and superalloys, coating materials, tantalum and niobium oxides, vanadium chemicals and antimony trioxide.
The Engineering Systems Division designs, engineers and produces advanced vacuum furnace systems and operates vacuum heat treatment facilities, primarily for the Aerospace and Energy (including solar and nuclear) industries. Furnace systems produced by AMG include vacuum remelting, solar silicon melting and crystallization, vacuum induction melting, vacuum heat treatment and high pressure gas quenching, turbine blade coating and sintering. AMG also provides vacuum case-hardening heat treatment services on a tolling basis.
Graphit Kropfmühl AG is a majority controlled, publicly listed subsidiary of AMG. Based on its secure raw material sources in Africa, China and Europe, Graphit Kropfmühl is a specialist in the production of silicon metal and the extraction, processing and refining of natural crystalline graphite for a wide range of energy saving industrial applications.
Timminco Limited is a publicly listed affiliate of AMG. Timminco produces silicon metal for the chemical, aluminum, electronic and solar industries. Timminco also produces solar grade silicon, using its proprietary technology for purifying silicon metal, for the solar energy industry.
With over 2,300 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, Czech Republic, the United States, Canada, Mexico, Brazil, and Sri Lanka and also has sales and customer service offices in Belgium, Russia, China and Japan (www.amg-nv.com).
For further information please contact:
AMG Advanced Metallurgical Group N.V. +1 610 975 4901
Vice President of Corporate Communications
Certain statements in this press release are not historical facts and are “forward looking.” Forward looking statements include statements concerning AMG’s plans, expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans and intentions relating to acquisitions, AMG’s competitive strengths and weaknesses, plans or goals relating to forecasted production, reserves, financial position and future operations and development, AMG’s business strategy and the trends AMG anticipates in the industries and the political and legal environment in which it operates and other information that is not historical information. When used in this press release, the words “expects,” “believes,” “anticipates,” “plans,” “may,” “will,” “should,” and similar expressions, and the negatives thereof, are intended to identify forward looking statements. By their very nature, forward looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections and other forward looking statements will not be achieved. These forward looking statements speak only as of the date of this press release. AMG expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward looking statement contained herein to reflect any change in AMG’s expectations with regard thereto or any change in events, conditions or circumstances on which any forward looking statement is based.
AMG affiliate Timminco to form joint venture with Dow Corning at Bécancour Silicon Metal Facilities