Corus raises £300m and steels UK workforce for more job cuts

Corus, the Anglo-Dutch steelmaker, set the scene for more job cuts yesterday as it launched a £307m share issue to pay for the restructuring of its loss-making UK steels business.

The share offer, a hybrid between a placing and a rights issue, could also pave the way for Corus to resurrect the sale of its aluminium business which was blocked earlier this year by its Dutch supervisory board.

The proceeds from the share offer will be used to fund the £250m rationalisation of Corus's UK operations from five down to three plants and cut steel production from 12 to 10 million tonnes.

The restructuring will lead to 1,150 job losses and save Corus £120m. In addition, the company announced it was seeking a further £350m of cost reductions through the rationalisation of white-collar departments such as finance, IT and personnel and through savings in manufacturing and supplies. Corus also warned that its Teesside plant could close in two years unless it found a joint venture partner for the plant.

Philippe Varin, who took over as its chief executive in May, refused to comment on the level of potential job reductions but other Corus executives pointed out that the company lost about 1,500 staff a year anyway through natural wastage.

The new cost-saving initiatives are part of an ambitious plan to improve Corus's performance by £680m over the next three years and close the "competitive gap" with rival steelmakers.

Corus has announced 10,000 job cuts since 2001 and when the latest UK restructuring is complete in a year's time, the workforce will have fallen to about 48,000.

Under the terms of the share offer, Corus is raising £291m net of expenses by issuing 1.3 billion new shares - five for every 12 in issue - at a price of 23.5p, a 10 per cent discount to Tuesday's closing price.

Corus's joint brokers Lazard and Cazenove had provisionally placed all 1.3 billion shares by 9am yesterday but existing shareholders will be able to claw back those shares in proportion to their current holdings, which makes the offer akin to a rights issue.

Corus shares rose 23 per cent, ending 6p up at a two-month high of 32p.

It was the refusal of the Dutch arm of Corus to sanction the £543m sale of the aluminium division to Pechiney earlier this year which precipitated the group's financial crisis. But yesterday Leo Berndsen, the chairman of the supervisory board of Corus Nederland, said it was "willing to enter into a constructive and open-minded dialogue with the group as to the future of its remaining aluminium activities at the appropriate time".

Life and Style
tech

Sales of the tablet are set to fall again say analysts

News
A Brazilian wandering spider
news

World's most lethal spider found under a bunch of bananas

Life and Style
fashion

British supermodel and hitmaker join forces to launch a 'huge song'

News
news

The Duke and Duchess of Cambridge announce they are set to welcome second child in spring

PROMOTED VIDEO
Life and Style
gaming

I Am Bread could actually a challenging and nuanced title

Sport
Mario Balotelli pictured in the win over QPR
footballInternet reacts to miss shocker for Liverpool striker
Voices
Sol Campbell near his home in Chelsea
voices
News
i100
News
Kimi the fox cub
newsBurberry under fire from animal rights group - and their star, Kimi
Sport
Fans of Palmeiras looks dejected during the match between Palmeiras and Santos
footballPalmeiras fan killed trying to 'ambush' bus full of opposition supporters
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Customer Service Executive / Inbound Customer Service Agent

£18 - 23k + Benefits: Guru Careers: We are seeking a Customer Service Executiv...

ASP.NET Web Developer / .NET Developer

£60 - 65k + Benefits: Guru Careers: We are seeking a ASP.NET Web Developer / ....

Operational Risk Manager - Asset Management

£60,000 - £80,000: Saxton Leigh: Our client is an leading Asset Manager based...

Project Coordinator - 12 month contract

£27000 - £32000 Per Annum: Clearwater People Solutions Ltd: Our large charity ...

Day In a Page

Oscar Pistorius sentencing: The athlete's wealth and notoriety have provoked a long overdue debate on South African prisons

'They poured water on, then electrified me...'

If Oscar Pistorius is sent to jail, his experience will not be that of other inmates
James Wharton: The former Guard now fighting discrimination against gay soldiers

The former Guard now fighting discrimination against gay soldiers

Life after the Army has brought new battles for the LGBT activist James Wharton
Ebola in the US: Panic over the virus threatens to infect President Obama's midterms

Panic over Ebola threatens to infect the midterms

Just one person has died, yet November's elections may be affected by what Republicans call 'Obama's Katrina', says Rupert Cornwell
Premier League coaches join the RSC to swap the tricks of their trades

Darling, you were fabulous! But offside...

Premier League coaches are joining the RSC to learn acting skills, and in turn they will teach its actors to play football. Nick Clark finds out why
How to dress with authority: Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear

How to dress with authority

Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear
New book on Joy Division's Ian Curtis sheds new light on the life of the late singer

New book on Ian Curtis sheds fresh light on the life of the late singer

'Joy Division were making art... Ian was for real' says author Jon Savage
Sean Harris: A rare interview with British acting's secret weapon

Sean Harris: A rare interview with British acting's secret weapon

The Bafta-winner talks Hollywood, being branded a psycho, and how Barbra Streisand is his true inspiration
Tim Minchin, interview: The musician, comedian and world's favourite ginger is on scorching form

Tim Minchin interview

For a no-holds-barred comedian who is scathing about woolly thinking and oppressive religiosity, he is surprisingly gentle in person
Boris Johnson's boozing won't win the puritan vote

Boris's boozing won't win the puritan vote

Many of us Brits still disapprove of conspicuous consumption – it's the way we were raised, says DJ Taylor
Ash frontman Tim Wheeler reveals how he came to terms with his father's dementia

Tim Wheeler: Alzheimer's, memories and my dad

Wheeler's dad suffered from Alzheimer's for three years. When he died, there was only one way the Ash frontman knew how to respond: with a heartfelt solo album
Hugh Bonneville & Peter James: 'Peter loves his classic cars; I've always pootled along fine with a Mini Metro. I think I lack his panache'

How We Met: Hugh Bonneville & Peter James

'Peter loves his classic cars; I've always pootled along fine with a Mini Metro. I think I lack his panache'
Bill Granger recipes: Our chef's heavenly crab dishes don't need hours of preparation

Bill Granger's heavenly crab recipes

Scared off by the strain of shelling a crab? Let a fishmonger do the hard work so you can focus on getting the flavours right
Radamel Falcao: How faith and love drive the Colombian to glory

Radamel Falcao: How faith and love drive the Colombian to glory

After a remarkable conversion from reckless defender to prolific striker, Monaco's ace says he wants to make his loan deal at Old Trafford permanent
Terry Venables: Premier League managers must not be allowed to dictate who plays and who does not play for England

Terry Venables column

Premier League managers must not be allowed to dictate who plays and who does not play for England
The Inside Word: Brendan Rodgers looks to the future while Roy Hodgson is ghost of seasons past

Michael Calvin's Inside Word

Brendan Rodgers looks to the future while Roy Hodgson is ghost of seasons past