Fletcher Building sells Pacific Steel for $120m

Last updated 13:10 17/02/2014
Mark Adamson
Fletcher Buildings chief executive officer Mark Adamson.

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Up to 70 jobs are at risk after Fletcher Building agreed to sell its Pacific Steel Group business for $120 million.

In a release to the NZX, Fletcher said it had reached agreement to sell its subsidiary, with facilities in Otahuhu and Fiji, to BlueScope Steel.

Under the deal BlueScope will construct a new billet caster at Glenbrook and the mill at Otahuhu will be decommissioned by the end of next year.

The Engineering, Printing and Manufacturing Union said the Otahuhu mill employed 70 workers and expressed concern over potential job losses.

EPMU national secretary Bill Newson said: "These are high-value, skilled jobs, and it's a blow to our members and their community to lose them."

Andrew Garey, the general manager of BlueScope subsidiary New Zealand Steel, said most Fletcher employees would be offered employment with the new owner.

"The majority of the workers will come across to us," he said.

Garey would not be drawn on exact numbers, and said the process of re-employment would be worked through over the next two years.

Fletchers' release said "most" employees of Pacific Steel would be offered similar employment with BlueScope, with those not offered new positions "given the opportunity to retrain and move to other roles in the Fletcher group''.

Australia's BlueScope is using its subsidiary, New Zealand Steel, to make the purchase.

Fletcher chief executive Mark Adamson said the sale to a local player was good news.

"This is a homegrown solution that secures a sustainable future for the New Zealand steel industry," he said.

Under the sale agreement $30m will be paid initially, with a further $30m to be paid once the Glenbrook facility is operational.

BlueScope will also buy working capital of the business, valued at $60m.

The transaction is contingent on Commerce Commission clearance and if approved is expected to be completed by June 30.

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- Fairfax Media

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