RHI signs share purchase agreement to acquire Indian Orient Refractories Ltd. and announces an open offer process (ad hoc)

15. January 2013

On January 15, 2013, a wholly-owned affiliate of RHI AG signed a share purchase agreement to acquire 43.6% of the share capital of Orient Refractories Ltd. (ORL).

ORL is an Indian producer of special refractories and monolithics listed on the National Stock Exchange of India as well as the Bombay Stock Exchange. The selling shareholders that hold the largest stake of the 43.6% are the immediate family members of S.G. Rajgarhia. The transaction price amounts to EUR 31 million (Rupees 2,3 billion). The proposed sale of shares as aforesaid is subject to various conditions precedent including regulatory approvals.

As a consequence of the abovementioned transaction, and based on the Securities and Exchange Board of India Regulations, RHI’s wholly-owned affiliate, acting in concert together with RHI AG, are making an open offer to the public shareholders for up to an additional 26% of the shares of ORL. The offer price is 43 Rupees (EUR 0,6 ) per equity share amounting to a total of up to EUR 18,5 million.

ORL develops and produces a wide range of special refractories and monolithic products for the iron and steel industry for domestic and international customers. Headquartered in New Delhi, India, ORL’s manufacturing and R&D facility is located in Bhiwadi, Rajasthan, together with eight sales offices located throughout India. For the business year ending March 2012, ORL had revenues of approx. EUR 44 million, an EBIT of approx. EUR 7 million. S.G. Rajgarhia will carry on as a member of the future board of directors of ORL as he will continue to own below 5% of the shares.

For RHI the acquisition is key in pursuing its growth strategy focused on emerging markets and strengthening its global market position in the flow control business segment with special refractories and monolithics. ORL’s business is complementary to RHI’s current market position with its strong presence at the mini-mills in India. ORL’s technical and service know-how as well as its Indian production facility will further strengthen RHI’s service-oriented sales approach for the growing Indian and Asian steel industry.