TK Aluminum Ltd. Announces Completion of the Sale of Teksid Aluminum Poland Sp.z o.o to Tenedora Nemak, S.A. de C.V.



    CARMAGNOLA, Italy, April 18 /CNW/ - TK Aluminum Ltd. (the "Company"), the
indirect parent of Teksid Aluminum Luxembourg S.a.r.l., S.C.A., announced
today that on April 11, 2007 it completed the sale of its subsidiary Teksid
Aluminum Poland Sp.z o.o ("Teksid Poland") to Tenedora Nemak, S.A. de C.V.
("Nemak"), a subsidiary of ALFA, S.A.B. de C.V. ("ALFA"). Pursuant to the
previously disclosed revised terms of the Nemak transaction, the Company
remains obligated to sell its remaining 40% equity interest in its Chinese
joint venture.
    Pursuant to the revised terms of the Nemak transaction, the aggregate
purchase price allocated to the sale of Teksid Poland was approximately
$56.1 million in cash consideration plus the issuance of an additional 0.83%
synthetic equity interest in the Nemak business. As detailed in the Attachment
to this press release, the aggregate cash proceeds received by the Company at
closing in connection with the sale of Teksid Poland were approximately
$29.9 million plus $3 million as the result of the issuance of a loan by ALFA,
prior to the deduction of a contingency reserve and other amounts permitted in
accordance with the supplemental indenture, effective as of March 15, 2007
(the "Supplemental Indenture"), governing the Company's outstanding 11 3/8%
Senior Notes due 2011. Pursuant to the terms of the Supplemental Indenture,
the Company is required to commence a tender offer with certain of the cash
proceeds from the sale of Teksid Poland not later than 30 days after
consummation of such sale.
    As further explained in the Attachment to this press release, the
aggregate proceeds were based on the purchase price allocation and the
estimated adjustments to the purchase price as contemplated by the revised
terms of the Nemak transaction. In addition, as previously disclosed,
$5 million was held back in escrow pursuant to the revised terms of the Nemak
Transaction in order to fund any potential shortfall of working capital or
excess net debt in connection with such transaction.
    The Attachment to this press release sets forth revised sources (the
"Revised Sources") to (i) reflect the actual proceeds received in respect of
the sale of Teksid Poland at closing; (ii) provide a comparison of the revised
estimates of the sources from Phase 2 as of April 11, 2007 to those provided
by the Company on February 27, 2007 and (iii) segregate the Company's
projections for the sales of Teksid Poland and its remaining equity interest
in its Chinese joint venture from one another. As further detailed in the
Revised Sources, the estimated Remaining Cash of Nemak Transaction set forth
in the Attachment in respect of the Teksid Poland sale is approximately
$3.8 million less than the Remaining Cash at Close of Nemak Transaction in
respect of the Teksid Poland Sale as estimated on February 27, 2007 (and
subject to the limitations, risks and uncertainties described in the February
27, 2007 press release). The Revised Sources are based on numerous assumptions
and projections and may prove to be materially inaccurate. We caution readers
to not place undue reliance on the Revised Sources, which speak as of the date
of this press release.

    The Revised Sources are subject to certain risks and uncertainties. Among
other things, there can be no assurance that the sale of the remaining equity
interest in the Chinese joint venture will be completed or that any of the
other preconditions to the Company's strategies and plans will be satisfied.
The Revised Sources contain unaudited financial information. Neither this
information, nor any other information appearing in this press release, has
been reviewed or audited by the Company's auditors. The cautionary statements
set forth above should be considered in connection with any subsequent written
or oral statement that we or persons acting on our behalf may issue.
    We do not undertake any obligation to review or confirm analysts'
expectations or estimates or to release publicly any revisions to forward
looking statement to reflect events that occur or circumstances that arise
after the date of this press release. This press release and the Revised
Sources set forth in the Attachment to this Press Release are for
informational purposes only.

    About Teksid Aluminum

    Teksid Aluminum is an independent manufacturer of aluminum engine
castings for the automotive industry. Our principal products are cylinder
heads, engine blocks, transmission housings and suspension components.
Information about Teksid Aluminum is available on our website at
www.teksidaluminum.com.

    
    TEKSID ALUMINUM
    Post POLAND Closing
    ----------------------------------------------------------------
    (Amounts in USD thousands, unless otherwise noted)
    (Preliminary and subject to change)
                                             Estimate 4/11/07
                                       -----------------------------
                                                             Total
                                        Poland    China     Phase 2
    ----------------------------------------------------------------
    Cash from Nemak                     56,092    15,319    71,411
      less Working Capital Adjustment  (18,468)        0   (18,468)
      less Net Debt Adjustment          (1,774)        0    (1,774)
      less Transaction related Taxes
       (due at Closing)                   (945)     (240)   (1,185)
    Net Adjusted Value                  34,905    15,079    49,984
    ----------------------------------------------------------------
      less Net Holdback                 (5,000)        0    (5,000)
      plus Loan at 11% PIK interest
       rate                              3,000     1,000     4,000
      less China Debt and capital
       leases to be paid by Teksid (b)  (5,632)        0    (5,632)
      plus additional A/R for VAT (c)    3,642         0     3,642
    ----------------------------------------------------------------
    Remaining Cash at Close of          30,915    16,079    46,994
     Nemak Transaction (d)               (e,f)               (e,f)
    ----------------------------------------------------------------
    ----------------------------------------------------------------

                                              Original Estimate 2/27/07
                                      ---------------------------------------
                                                             Total
                                        Poland    China     Phase 2    Delta
    -------------------------------------------------------------------------
    Cash from Nemak                     56,092    15,319    71,411         0
      less Working Capital Adjustment   (3,833)        0    (3,833)  (14,635)
      less Net Debt Adjustment        (9,875)(a)       0  (9,875)(a)   8,101
      less Transaction related Taxes
       (due at Closing)                 (1,418)        0    (1,418)      233
    Net Adjusted Value                  40,966    15,319    56,285    (6,301)
    -------------------------------------------------------------------------
      less Net Holdback                 (5,000)        0    (5,000)        0
      plus Loan at 11% PIK interest
       rate                              2,931       977     3,908        92
      less China Debt and capital
       leases to be paid by Teksid (b)  (4,232)        0    (4,232)   (1,400)
      plus additional A/R for VAT (c)        0         0         0     3,642
    -------------------------------------------------------------------------
    Remaining Cash at Close of
     Nemak Transaction (d)             34,665(g)  16,296   50,961(g)  (3,967)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (a) Based upon Teksid cash on hand at close of $0, recourse factoring of
        $6,475 and non-recourse factoring beyond threshold amount of $3,400,
        in each case as estimated on February 27, 2007 (and subject to the
        limitations, risks and uncertainties contained in the February 27,
        2007 press release)
    (b) According to the original terms of the China Debt, such debt will be
        paid out of the proceeds from sales to Nemak prior to the China
        closing
    (c) Relates to estimated VAT receivable of the Company in respect of pre-
        closing periods. Collection of this receivable is expected to occur
        over a period of approximately 60-90 days from the consummation of
        the Teksid Poland sale
    (d) Prior to reduction for Permitted Uses and contingency reserve
    (e) Based upon Remaining Cash at Close of Nemak Transaction in respect of
        the Teksid Poland sale and receipt of VAT amounts
    (f) Includes unfavorable exchange rate impact of $484 (Euro/$ rate of
        1.295 original vs 1.3318 on April 11, 2007)
    (g) Based upon Remaining Cash at Close of Nemak Transaction as estimated
        on February 27, 2007 (and subject to the limitations, risks and
        uncertainties contained in the February 27, 2007 press release)
    





For further information:

For further information: Investor Relations, at (248) 304-4004, or email
investorinfo@teksidaluminum.net

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