Commercial Metals Company To Sell Rancho Cucamonga Site

Rhea-AI Summary

Commercial Metals Company (NYSE: CMC) has announced an agreement to sell land from its former Steel California and Rebar Etiwanda operations in Rancho Cucamonga for approximately $300 million. The sale aims to partially fund the new Arizona 2 micro mill expected to launch in the second half of fiscal 2023. CMC ceased Steel California operations in December 2020, and Rebar Etiwanda customers will be served from other locations. The transaction is anticipated to close in Q2 of fiscal 2022, pending due diligence and customary conditions.

Positive

• Sale proceeds of approximately $300 million will help fund new micro mill in Arizona.
• Repurposing of the site for industrial use may lead to new development opportunities.

Negative

• Closure of Steel California operations in December 2020 may indicate ongoing operational challenges.
• Loss of Rebar Etiwanda operations could impact customer service and market presence.

IRVING, Texas, Sept. 30, 2021 /PRNewswire/ -- Commercial Metals Company (NYSE: CMC) today announced it has reached an agreement to sell the land underlying its former Steel California and Rebar Etiwanda operations, located in Rancho Cucamonga, 40 miles east of Los Angeles.  The Company's Steel California operations ceased in December 2020, and customers of its Rebar Etiwanda operations will be serviced from other CMC fabrication locations.  The site is expected to be repurposed for other industrial uses.

Gross proceeds from the sale will total approximately $300 million and will be used to partially offset the cost of the Company's new Arizona 2 micro mill, anticipated to be commissioned in the second half of fiscal 2023. The sale is expected to close during CMC's second fiscal quarter of 2022 and is subject to purchase price adjustments.  The closing of the sale transaction is also subject to a customary due diligence review period, as well as customary closing conditions.

About Commercial Metals Company

Commercial Metals Company and its subsidiaries manufacture, recycle and fabricate steel and metal products, related materials and services through a network of facilities that includes seven electric arc furnace ("EAF") mini mills, two EAF micro mills, a rerolling mill, steel fabrication and processing plants, construction-related product warehouses, and metal recycling facilities in the U.S. and Poland.

 

View original content:https://www.prnewswire.com/news-releases/commercial-metals-company-to-sell-rancho-cucamonga-site-301388642.html

SOURCE Commercial Metals Company

FAQ

What is the significance of Commercial Metals Company's land sale announcement on September 30, 2021?

The sale of land for $300 million will help finance the Arizona 2 micro mill, signaling strategic investment.

When is the sale of the Rancho Cucamonga site expected to close?

The transaction is anticipated to close in the second fiscal quarter of 2022.

What will happen to the Rebar Etiwanda operations after the sale?

Customers of the Rebar Etiwanda operations will be serviced from other CMC fabrication locations.

How much money will Commercial Metals Company receive from the land sale?

The gross proceeds from the sale will total approximately $300 million.

What operational changes occurred at Commercial Metals Company prior to the land sale?

Steel California operations ceased in December 2020, which may indicate a shift in business focus.