Capital increase to expand the employee participation plan
On March 9, 2015, the Management Board of voestalpine AG resolved to exercise its authorization to increase the Company’s share capital pursuant to Section 4 (2b) of the Articles of Incorporation and increase the share capital of voestalpine AG by around 1.45% by issuing 2.5 million new, no-par value bearer shares. The newly issued shares will ensure expansion and consolidation of the employee participation plan of voestalpine AG. The capital increase was approved by the Supervisory Board on March 26, 2015 and recorded in the Commercial Register on April 25, 2015 and is therefore effective as of this date. With this entry into the Commercial Register, the share capital of voestalpine AG rose to EUR 317,851,287.79 and is divided into 174,949,163 shares.
Changes in the scope of consolidation
Up to March 31, 2015, the companies voestalpine Tubulars GmbH, voestalpine Tubulars GmbH & Co KG, and CNTT Chinese New Turnout Technologies Co., Ltd. were included in the consolidated financial statements of voestalpine AG using the equity method; as the Group obtained control over these companies as of April 1, 2015, with the present consolidated financial statements, full consolidation is being applied.
For detailed information about these changes, please refer to the Notes, Chapter D. Acquisitions and other additions to the scope of consolidated financial statements.
Direct reduction plant in Texas, USA
The construction of the direct reduction plant in Corpus Christi, Texas, USA, is in the final stage. It will produce high quality HBI (hot briquetted iron/sponge iron) and will be the largest and most modern plant of its kind. HBI is created by reducing iron ore pellets (pre-concentrated ore) using natural gas. The use of natural gas, which is more environmentally friendly, instead of coke and state-of-the-art technologies for dust prevention and water treatment make the facility an international environmental benchmark.
The port facility was already completed in the first half of 2015/16. The 300-meter-long loading pier also has two unloading cranes, a ship-loading crane, and a conveyor system for ore and/or pellets and HBI. The (enclosed) pellet storage facility, which is the size of five soccer fields, was also completed on schedule. After the roof of the reduction tower, which is the core piece of the facility, was completed in January 2016, the current focus of activities has been the final installation of electrical systems, electronics, piping, and conveyor technology. The first parts of the facility have already been successfully tested. The new plant is scheduled to be commissioned in the summer of 2016.
In preparation for the launch of operations, a freighter carrying iron ore pellets arrived from Brazil in late April and was unloaded without any complications. Once operation is fully up and running, around three million tons of pellets will be required to produce two million tons of high-quality HBI annually.
As far as sales are concerned, including voestalpine’s own demand of around 800,000 tons annually, around 90% of the HBI production volume has already been reserved. The Austrian steel sites in Linz and Donawitz expect to be supplied with the high-quality pre-material from Texas, USA, beginning in the fall of 2016. From that point on, the new facility and its positive cost effects will make an important contribution to ensure the long-term viability of voestalpine’s steel base in Austria.
Closure of voestalpine Arkada Profil
The process of closing voestalpine Arkada Profil, which is headquartered in Yartsevo, Russia, commenced as of the beginning of the 2016 calendar year. Even very rigorous operational and financial restructuring measures were ultimately not able to reestablish long-term prospects for the company. The original objective of this acquisition was to supply the Russian market with premium products in the special sections segment. However, as a result of the negative economic development in 2014 and 2015, there was ultimately no alternative to closure. In the meantime, the sale of machines, equipment, and inventory was successfully completed in the fourth quarter of 2015/16, and business activities were definitively discontinued. The company, which is part of the Tubes & Sections business segment, and its most recent staff of 193 employees generated revenue of EUR 13.1 million in the business year 2014/15.
Corporate Governance Report
The Corporate Governance Report for the business year 2015/16 was published on the voestalpine AG website under the heading “Investors.”
- The exact link is:
http://www.voestalpine.com/group/en/investors/corporate-governance
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