Pechiney Contunues to Restructure
October 22, 2002
As Pechiney continues to restructure its assets, the group recently announced that it will be restructuring its Ferroalloys division's head office in order to improve the profitability of this business. A EUR 7m provision will consequently be booked in the third quarter accounts. This decision will increase the year to date amount for restructuring charges to EUR 60m, of which around EUR 40m will not have any impact on cash flow. This amount is comparable to that of the first nine months of 2001. In early October, Pechiney also announced that it would reduce its workforce at its conversion plant in Ravenswood, with a view to focus the facility on profitable products and customers. The corresponding restructuring charge is estimated at EUR 9m and will be accounted for in the fourth quarter accounts. In addition, in line with the application of the FAS 142, the group will be taking a EUR 16m exceptional goodwill amortization charge relating to its Ravenswood activity in its third quarter accounts. The group has also announced that its significant legal disputes came to an end during the third quarter. The group has settled two significant disputes, one relating to a patent infringement case and another linked to a metal trading business, which it sold in 2000. Furthermore, Pechiney has negotiated an insurance policy that will cover the rehabilitation costs of a previously owned mine in the United States. These items will feature in the group's third quarter other income (expense), which will push up the year to date other income (expense) charges to EUR 57m.