Saturday 2 November 2013

Metal Tech Limited claim $500 million

Metal-Tech Ltd. (Israel) v. Republic of Uzbekistan $500,000,000 Covington & Burling White & Case ICSID/Washington, D.C. John Townsend; Gabrielle Kaufmann-Kohler; Claus von Wobesey ------------------------------------------------------------------------------------------- 12 September 2005 Metal-Tech ('Metal-Tech' or the 'Company') Announces Record Half Year Results Interim Results for the 6 months ended 30 June 2005 Metal-Tech, a leading specialty metal and metal-based chemicals company focusing on the production and upgrading of low grade metals, is pleased to announce its results for the period 1 January 2005 to 30 June 2005, its first set of results since its admission to AIM in May 2005. Metal-Tech, which is based in Israel but operates in markets around the world, produces tungsten, molybdenum and other specialty metals, chemicals and metal powders which are used mainly in the stainless steel, petrochemical and cutting tools industries. Highlights: • Revenues up by 227% to US$55.0 million (2004: US$16.8 million) • Gross profit margin increased to 27.0% from an average of 24.2% in the full year of 2004 • Earnings per share (EPS) up 320% to US$0.21 (2004: US$0.05) • Net profit of US$8.1 million, significantly above half year 2004 net profit of US$1.6 million • Six months net profit to 30 June 2005 exceeds 90% of net profit for full year 2004 • Successful admission to AIM in May 2005 raising £10.5 million before expenses • Opening ceremony of the new molybdenum plant in Mongolia took place on 5th September, making Metal-Tech the pioneer, and as yet only, foreign company to establish a hydrometallurgy chemical plant in Mongolia. The new plant should increase the profit margin of the Mongolian present operation. Commenting on the results, Ran Maimon, Chief Executive of Metal-Tech, said: 'We are very pleased by these financial results which have exceeded our internal budgets. We joined AIM in May of this year and have successfully grown the business in production quantities and sales to existing and new customers. We have successfully established on schedule a new state of the art molybdenum plant in our subsidiary in Mongolia together with Erdenet Mining Corporation, which will strengthen our position in the Asian markets. The plant which converts low grade molybdenum concentrate into quality molybdenum oxide is designed to a capacity of 2,000 tons per year and is well placed at a time where there is global shortage of molybdenum refining. The plant is due to be in operation by the end of this year. The current intention is to declare an inaugural dividend at the end of the current financial year.' -Ends- For further information, please contact: Ran Maimon, Chief Executive Officer: ran@metal-tech.co.il Modi Ashkenazy, Chief Financial Officer: modi@metal-tech.co.il Tel. +972 8 6572333 Henrietta Hirst, Par Excellence PR, London henrietta@parexcellencepr.com Tel. 020 7262 6648 / 07880 742 375 Interim Results Excellent progress has been made during the last six months in increasing revenues from existing customers and in broadening the Company's customer base. Consequently, Metal-Tech's results have significantly exceeded management expectations. The Company's management remains committed to expanding the Company's activities with the introduction of more technically advanced products, as well as the additional diversification of supply sources, in order to secure business growth. The significant growth in sales during the first half of 2005 was the result of high demand and increased production in all of the Company's plants. Metal-Tech benefited from favorable market conditions in the metals industry combined with an efficient sales and production operation. The Company saw strong growth in all of its geographic markets, in particular in the US, China and Japan. This growth was primarily driven by increasing market share in all markets as well as by strong growth in demand from the oil refinery catalyst industry in Japan. Tungsten prices increased significantly during the first few months of 2005 as a result of greater demand, mainly from Chinese internal consumption. Molybdenum prices remained at relatively high levels throughout the six month period. Management remains confident about future prospects for Metal-Tech. The successful IPO completed in May 2005 will enable the Company to invest in further growth and expansion. Revenues for the six month period ended 30 June 2005 were US$55,018,000 compared to US$16,804,000 for the comparable period in 2004, reflecting an increase of 227%. Net profit for the six month period to June 2005 was US$8,069,000, representing an improvement of 390% compared to US$1,646,000 for the comparable period in 2004. Gross profit for the six month period ended 30 June 2005 was US$14,867,000, representing a 27.0% margin, compared with US$2,482,000 and a 14.8% margin for the comparable period in 2004. The improvement in gross margin is a result of higher average selling prices through improved quality and better production efficiency. During the six month period ended 30 June 2005 cash and cash equivalents increased by US$14,767,000 to US$17,234,000 mainly due to proceeds from the IPO. The working capital balance of the Company increased by US$7,342,000 as a result of increased sales and increased cash settlements with suppliers, mainly in China (the effect of the significant increase of tungsten prices during the first half of 2005). The Company does not expect additional significant changes in its required working capital in the second half of the year. Long-term debt during the six month period ended 30 June 2005 was reduced from US$13,107,000 to US$12,330,000 due to the repayment of long-term loans amounting to US$5,147,000, mainly in Uzbekistan, which was offset by new bank loans drawn down to finance the new plant in Mongolia. Outlook The Company performed strongly in the first half of 2005 and the board therefore remains confident of the Company's prospects for the rest of the financial year. In addition, market conditions are encouraging and metal prices remain at high levels as a result of continuous strong demand worldwide. The Company's strong position in Mongolia, its technical expertise in the engineering and production of quality specialty metals, provide solid ground for further expansions especially in the geographical areas in which the Company already operates. CONSOLIDATED STATEMENTS OF OPERATIONS U.S. dollars in thousands (except shares and per share amounts) Unaudited six months, Audited 12 ended 30 June, months ended 31 December, 2005 2004 2004 -------- -------- --------- Revenues 55,018 16,804 58,972 Cost of revenues 40,151 14,322 44,672 -------- -------- --------- Gross profit 14,867 2,482 14,300 -------- -------- --------- Research and development 40 196 243 expenses, net Selling and marketing 1,482 619 1,111 expenses General and administrative 948 429 1,796 expenses -------- -------- --------- Total operating expenses 2,470 1,244 3,150 -------- -------- --------- Operating income (loss) 12,397 1,238 11,150 Financial expenses, net 311 186 1,655 Other income (expense), net 18 -------- -------- --------- Income (loss) before taxes on 12,086 1,052 9,513 income Taxes on income 2,180 - 809 -------- -------- --------- Net Income for the period 9,906 1,052 8,704 ======== ======== ========= Attributed to: Equity holders of the Parent 8,069 1,646 8,871 Minority interests 1,837 (594) (167) -------- -------- --------- 9,906 1,052 8,704 ======== ======== ========= Basic and diluted earnings 0.21 0.05 0.29 (loss) per share ======== ======== ========= ======== ======== ========= Number of shares used for 38,376,923 30,300,000 30,300,000 computing basic and diluted earnings per share CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands Unaudited Unaudited Audited 30 June, 30 June, 31 December, 2005 2004 2004 ASSETS CURRENT ASSETS: Cash and cash equivalents 17,234 840 2,467 Short-term deposits 164 Short-term restricted cash 912 900 748 Trade receivables 16,206 3,816 13,432 Due from minority interest in - 1,196 283 subsidiary Other accounts receivable 2,435 900 1,715 Inventories 11,638 5,287 12,747 -------- -------- --------- 48,425 12,939 31,556 -------- -------- --------- LONG-TERM ASSETS Restricted cash 912 1,736 1,495 Deferred taxes 500 -------- -------- --------- 1,412 1,736 1,495 FIXED ASSETS: Cost 41,466 30,522 32,974 Less - accumulated depreciation 13,243 10,502 11,643 -------- -------- --------- 28,223 20,020 21,331 -------- -------- --------- TOTAL ASSETS 78,060 34,695 54,382 ======== ======== ========= CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands (except share data) Unaudited Unaudited Audited 30 June, 30 June, 31 December, 2005 2004 2004 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Short-term bank credit 5,701 5,418 4,203 Short-term loans and current 3,716 5,574 6,336 maturities Trade payables 10,195 6,692 20,025 Related parties 1,184 180 1,505 Other accounts payable 9,469 3,412 4,596 --------- -------- --------- 30,265 21,276 36,665 --------- -------- --------- LONG-TERM LIABILITIES: Long-term loans 8,614 9,580 6,771 Accrued severance pay 264 109 188 --------- -------- --------- 8,878 9,689 6,959 --------- -------- --------- Total liabilities 39,143 30,965 43,624 --------- -------- --------- EQUITY: Ordinary shares 2,399 2,031 2,031 Additional paid-in capital 23,995 7,405 7,405 Accumulated net profit 71 (39) (242) (loss) on cash flow hedges Retained earnings 9,140 (6,154) 1,071 (accumulated deficit) --------- -------- --------- 35,605 3,243 10,265 MINORITY INTEREST 3,312 487 493 --------- -------- --------- Total Equity 38,917 3,730 10,758 --------- -------- --------- Total Liabilities and Equity 78,060 34,695 54,382 ========= ======== ========= CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY U.S. dollars in thousands Accumulated Retained Additional net gain earnings (loss) on Share paid-in cash flow (accumulated capital capital hedges deficit) Total Balance as 2,031 7,405 (242) 1,071 10,265 of 1 January, 2005 (audited) Net profit - - 313 - 313 on cash flow hedges Proceeds 368 16,590 - - 16,958 from issuance of ordinary shares, net of issuance expenses Net income - - - 8,069 8,069 ------- ------- -------- -------- -------- Balance at 2,399 23,995 71 9,140 35,605 30 June, ======= ======= ======== ======== ======== 2005 (unaudited) Balance as 2,031 7,405 (267) (7,800) 1,369 of 1 January, 2004 (audited) Net profit - - 228 - 228 on cash flow hedges Net income - - - 1,646 1,646 ------- ------- -------- -------- -------- Balance at 2,031 7,405 (39) (6,154) 3,243 30 June, ======= ======= ======== ======== ======== 2004 (unaudited) Balance at 2,031 7,405 (267) (7,800) 1,369 1 January , 2004 Net gain on - - 25 - 25 cash flow hedges Net income - - - 8,871 8,871 ------- ------- -------- -------- -------- Balance at 2,031 7,405 (242) 1,071 10,265 31 December ======= ======= ======== ======== ======== , 2004 CONSOLIDATED STATEMENTS OF CASH FLOWS U.S. dollars in thousands Unaudited Unaudited Audited 30 June, 30 June, 31 December, 2005 2004 2004 Cash flows from operating activities: Net income 8,069 1,646 8,871 Adjustments required to reconcile (4,196) 2,020 1,528 net income to net cash provided -------- -------- --------- by (used in) operating activities (a) Net cash provided by operating 3,873 3,666 10,399 activities -------- -------- --------- Cash flows from investing activities: Purchase of fixed assets (8,548) (2,174) (4,703) Proceeds from sale of fixed 35 22 92 assets Short-term deposits, net 164 66 (98) Restricted cash 419 389 782 -------- -------- --------- Net cash used in investing (7,930) (1,697) (3,927) activities -------- -------- --------- Cash flows from financing activities: Minority investment in a 1,265 712 1,204 subsidiary Proceeds from short and long-term 4,250 500 1,263 loans Repayment of short and long-term (5,147) (3,463) (6,379) loans Net proceeds from issuance of 16,958 shares Short-term bank credit, net 1,498 794 (421) -------- -------- --------- Net cash provided by (used in) 18,824 (1,457) (4,333) financing activities -------- -------- --------- Increase in cash and cash 14,767 512 2,139 equivalents Cash and cash equivalents at the 2,467 328 328 beginning of the year -------- -------- --------- Cash and cash equivalents at the 17,234 840 2,467 end of the year ======== ======== ========= CONSOLIDATED STATEMENTS OF CASH FLOWS U.S. dollars in thousands Unaudited Unaudited Audited 30 June, 30 June, 31 December, 2005 2004 2004 (a) Adjustments required to reconcile net income to net cash provided by (used in) operating activities: Income and expenses not involving cash flows: Minority interest 1,837 (594) (167) Depreciation 1,628 1,186 2,390 Accrued severance pay 76 (3) 76 Foreign exchange differences on short and 120 111 217 long-term liabilities, net Capital gains on sales of fixed assets (7) (2) (18) Other - - (40) --------- --------- --------- 3,654 698 2,458 --------- --------- --------- Changes in operating assets and liabilities: Decrease (increase) in related parties, (371) 56 1,381 net Increase in trade receivables, net (2,774) (1,047) (10,663) Decrease (increase) in other accounts (1,220) 221 (594) receivable Decrease (increase) in inventory 1,109 3,213 (4,247) Increase (decrease) in trade payables (9,830) (500) 12,833 Increase (decrease) in other accounts 5,236 (621) 360 payable --------- --------- --------- (7,850) 1,322 (930) --------- --------- --------- (4,196) 2,020 1,528 ========= ========= ========= The accompanying notes are an integral part of the consolidated financial statements. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - GENERAL: The interim financial statement as of 30 June 2005 and for the six month period then ended (hereafter - the interim statements) were prepared in condensed form in accordance with IAS 34 - 'Interim Financial Reporting'. The accounting policies applied in preparation of the interim financial statements are consistent with those used in the 2004 annual financial statements but have not been audited by the auditors. Nevertheless, the interim statements do not include all the information and explanations required for annual financial statements, and should be read in conjunction with the 2004 annual financial statements. Costs incurred unevenly during the year are brought forward or deferred, for interim reporting purposes if, and only if, such costs may be brought forward or deferred in the annual reporting. Taxes on income for the interim periods are included based on the best estimate of the anticipated average annual tax expense for the entire year; changes in said estimate, as well as changes in the amount of the tax saving to be utilized in the following years, are included as an expense for the current quarter. NOTE 2 - REVENUES BY GEOGRAPHICAL SECTOR Revenues classified by geographical destinations based on the customer location: Unaudited six months, Audited 12 Ended 30 June, months ended 31 December, 2005 2004 2004 United States 11,378 4,374 11,473 China 9,869 3,925 21,878 Japan 20,930 2,448 11,830 Europe 5,948 4,781 9,332 Others 6,893 1,276 4,459 55,018 16,804 58,972 END

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THE BUYOUT

 Introduction.
We respectfully offer to purchase from you all of your Metal-Tech Shares at US$0.5064 (£0.321, according to the representative exchange rate on August 28, 2012) per share. We believe that this is a good opportunity to achieve liquidity for all of your Metal-Tech Shares due to the fact that the tender offer price is higher by approximately (i) 341% than £0.094, the average of the closing prices of the Metal-Tech Shares on the AIM over the 60 trading days ending on August 6, 2012, which was the last business day before the Company's announcement of the SSA and the Offeror's request to convene an extraordinary shareholders meeting to approve the delisting of Metal-Tech from the AIM, and (ii) 428% than £0.075, the average of the closing prices of the Metal-Tech Shares on the AIM over the 12-month period between August 1, 2011 and August 6, 2012.

AND METAL TECH LOST JURISDICTION ???

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