Corus sells Canadian smelter for £108m

Corus yesterday kicked off the planned sale of its aluminium interests by selling off its stake in a Canadian smelter.

Analysts were impressed with the $165m (£108m) price achieved for Corus's 20 per cent holding in the Aluminerie Alouette smelter, which was sold to Alcan. The move leaves the way open for the divestment of its other aluminium assets, which are mostly in Europe and 100 per cent owned.

In March, Corus said it would exit aluminium, which it inherited when the former British Steel merged with the Dutch group Hoogovens in 1999. The divestment will allow it to reduce debt, focus on steel and make acquisitions in this area.

Corus said yesterday that it wanted to sell the remaining aluminum business as a single block, by the end of this year. Pechiney, a French company, is reckoned to be the front-runner to buy it, though Corus said it was talking to several parties.

Pechiney was not thought to be interested in acquiring assets outside Europe. Pechiney, which is struggling with falling aluminium prices and a weak dollar, said in June that it planned to make a bid for the Corus assets.

Edward Maravanyika, an analyst at Goldman Sachs, said: "The upper end of the range for the remaining aluminium [assets] is $1.4bn but, given that state of the market, I expect Corus to get just over $1bn."

Alouette contributed a pre-tax profit of £9.2m to the Corus results for the year ending 29 December 2001. Alcan already owned 20 per cent of the smelter.

Corus was initially expected to sell all of its aluminium assets by the summer. Yesterday, Tony Pedder, the chief executive, said the aim was the year-end – a comment analysts took as a sign that Corus was holding out for good prices in a difficult market.

"This reiterates that Corus won't sell these valuable assets at firesale prices," Mr Maravanyika said.

The sale of the interest in the Canadian smelter leaves two additional smelters in the Netherlands and Germany and plants in Germany, Canada, Belgium and China which make aluminium metal products for customers in the likes of the aerospace industry.