Under the terms of the agreement, AGY Shanghai is required to change its name within thirty days of closing of the Divestiture to no longer use the “AGY” name.
“We are very pleased to announce the agreement with CPIC to purchase our Shanghai business unit,” said Richard Jenkins, Interim CEO of AGY.
“This divestiture allows us to focus on delivering value to our customers with products produced in the US, including our fine yarns and S-2 products. We believe that this is an important step towards successfully implementing our business strategy to be a world-class producer of advanced materials.”
Drew Walker, President of AGY, added, “Despite the sale of the Shanghai division, AGY will continue to focus on the rapidly growing specialty Electronics Yam markets. AGY offers a valuable and expanding product set to meet the growing demand for new high-value glass that stems from the growth of next-generation mobile communication devices.”
The closing of the Divestiture is subject to a number of conditions precedent, including receipt of the required government approvals and of consent from the Bank of Shanghai.
The purchase agreement is subject to termination if the required governmental approvals for the Divestiture are not obtained within three months or if the Bank of Shanghai does not give its written consent to the Divestiture within forty-five days. Subject to satisfaction or waiver of the conditions precedent to closing, the Divestiture is expected to close during the third quarter of 2013.
The transaction will result in a reduction in non-recourse debt totaling US$38.8 million at March 31, 2013. The Company’s AGY US and AGY Asia operating segments are managed separately based on differences in their manufacturing and technology capabilities, products and services and their end-markets as well as their distinct financing agreements. During the first quarter of 2013, AGY Asia production output accounted for less than 0.7% of the sales recognized by the AGY US segment.