Corus to sell £1bn aluminium unit

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The Independent Online

Corus, the struggling Anglo-Dutch steel company, is expected to put its aluminium business up for sale today with a £1bn price tag.

The company has called in the unions for a briefing on the move and its full-year results first thing this morning. Despite aluminium being one of its few profitable operations, Corus has decided that it is not big enough in the activity to justify keeping the business, which has plants in Europe. Credit Suisse First Boston, the investment bank, is to conduct an auction of the division.

Corus is expected to report an operating loss of some £450m for 2001, while forecasts for the pre-tax loss range from £550m to £650m.

The aluminium operations of Corus are dwarfed by larger rivals in terms of product output, producing less than a quarter of the more than 2 million tonnes supplied by the likes of Alcoa and Alcan. Corus made a double-or-quits decision after losing out in the bidding war to buy VAW, the German aluminium operation.

The world's largest aluminium groups, including Pechiney and Alcan, as well as private equity firms are expected to be interested in the Corus aluminium operations.

Ken Penton, of the ISTU steel union, said: "This is worrying. We will want to know from the company what the rationale is and what they will do with the money."

The union thinks that better-performing parts of Corus should help keep other parts of the company afloat when times are tough. However Corus needs cash to reduce debt, which stands at about £1.6bn, and to pay for reorganisation costs and investment.

Analysts will look for Corus' assessment of the likely impact of the controversial decision by the US to slap tariffs of up to 30 per cent on steel imports. The move will hit two Corus plants around Rotherham, south Yorkshire, in particular, which produce most of the company's US exports.

Separately, evidence emerged over the weekend of a split in the US administration after the Treasury Secretary Paul O'Neill told a foreign policy think-tank that he disagreed with the imposition of steel tariffs, according to a report in The New York Times. Mr O'Neill apparently affirmed his long-held personal opposition to trade barriers.

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