RUUKKI GROUP CONSOLIDATES CONTROL AND OWNERSHIP...

07:00 London, 09:00 Helsinki, 18 April 2012 - Ruukki Group Plc, Stock Exchange Release

RUUKKI GROUP CONSOLIDATES CONTROL AND OWNERSHIP OF ITS SPECIALITY ALLOYS BUSINESS

Ruukki Group Plc ("Ruukki" or the "Company") (LSE: RKKI, OMX: RUG1V) is pleased to announce it has signed an agreement with Kermas Limited ("Kermas") for the acquisition of Elektrowerk-Weisweiler GmbH ("EWW"). In addition Ruukki and Kermas have agreed to terminate the profit and loss sharing arrangement ("PLSA") in relation to Türk Maadin Sirketi A.S ("TMS") and RCS Limited ("RCS") and certain other arrangements which were entered into in October 2008.

Under the terms of the agreements:

• Ruukki will acquire, through its wholly owned subsidiary, Ruukki Holdings Limited, 100% of the shares in EWW for approximately EUR 17.3 million in cash; 

• The profit and loss sharing arrangement in relation to TMS and RCS will be terminated for EUR 8 million in cash; 

• The remaining 70,194,518 options granted to Kermas relating to the profit and loss sharing arrangement, as part of the 2008 transaction, will be cancelled; and 

• The restrictions regarding the sale or transfer of Ruukki's shares in TMS and RCS ("Ruukki Lock-up Arrangements") will be cancelled. 

These steps complete the consolidation of the Group's ownership and control over its Speciality Alloys business in Europe, part of which was initially acquired from Kermas in 2008. Kermas is a private investment vehicle with interests in the mining and minerals sector and a major shareholder of Ruukki with a 28.49% holding. As a result, the proposed acquisition by the Company of the entire issued share capital of EWW and the termination of the PLSA, Ruukki Lock-up Arrangements and the management agreement (together being the "Transaction") constitute a related party transaction and are conditional, inter alia, on the approval of the Company's independent shareholders at the Annual General Meeting to be held at 10:00 a.m. (Finnish time) on Thursday 10 May 2012.

The Speciality Alloys business is a key production division of Ruukki and the Company believes that it is now well positioned to enhance the value created within this business by consolidating its control and ownership across the mining, processing and marketing operations. The consideration for the Transaction will be funded by the Company's existing cash resources.  The Board considers this Transaction as the optimal use of the funds available to the Company and is consistent with Ruukki's vision to become a competitive major player in the chrome industry within the next five years.

Thomas Hoyer, CEO, commented "Over the past four years Ruukki has been strengthening its understanding and management of the Speciality Alloys operations and it is no longer necessary to have Kermas' involvement.  This transaction completes the initial acquisition of the Speciality Alloys businesses back in 2008 and now gives Ruukki complete control over both its production divisions; FerroAlloys and Speciality Alloys.  

The Speciality Alloys division is currently our most profitable operation with good growth prospects. This acquisition is expected to enhance the division's long term profitability through securing the supply chain and erasing the risk relating to the tolling arrangement. It is vital that we have complete control over our assets and that the supply chain from mine to customer across the whole Group is secured and fully integrated.

We continue to see good demand for our highly specialised niche products and believe we can continue to secure long term contracts for our products."

Information on Speciality Alloys
Ruukki's Speciality Alloy production division, which in 2011 generated EBITDA of EUR 13.8 million (2010: EUR 7.8 million) consists of TMS, the Turkish mining and beneficiation operations, the highly specialised smelting operations of EWW, and RCS, Ruukki's sales and marketing arm.  TMS supplies chromite concentrate to EWW and sells lumpy chrome ore to stainless steel manufacturers in China and India.

Information on EWW
EWW, based in Eschweiler-Weisweiler, Germany is a critical component in Ruukki's Speciality Alloys segment, currently operating under a tolling agreement between EWW and RCS. EWW is a highly specialised ferrochrome smelting operation that produces a range of specialist products, such as specialised Low Carbon and Ultralow Carbon Ferrochrome, which are sold internationally to customers in the automotive, aerospace and power generation industries by RCS.

Ruukki has incorporated EWW's financial statements in its consolidated financial statements for the financial years ended 31 December 2008, 31 December 2009, 31 December 2010 and 31 December 2011.

For the 12 months ended 31 December 2011, EWW's income statement showed a profit before tax of EUR 563,195.73 (2010: EUR 235,459.02) and a profit after tax of EUR 354,454.12 (2010: EUR 1,227,601.01).  The value of EWW's gross assets as at 31 December 2011 was EUR 22,586,081.31.

Consideration Payable
Subject to the approval of the Transaction by the independent shareholders of the Company, the Company will acquire, through its wholly owned subsidiary, Ruukki Holdings Limited, the entire issued share capital of EWW (the "Sale Share"). The consideration payable for the purchase of the Sale Share as at 31 March 2012 is €15,000,000, which shall be subject to adjustment to reflect EWW's net debt position at closing and is estimated by the Company to result in the payment of a further €2,300,000, making the total consideration payable to Kermas in respect of the Sale Share at closing approximately €17,300,000. The purchase price is subject to a maximum adjustment of €5,000,000 making the maximum consideration payable €20,000,000. Subject to the approval of the Transaction by the independent shareholders of the Company the consideration payable for the termination of the PLSA and the related termination of the Ruukki Lock-up Arrangements and the management agreement will be €8,000,000, being the aggregate amount, as adjusted, equivalent to the amount of accrued option rights currently held by Kermas together with the amount estimated to become payable in respect of the profit share element of the PLSA for the years 2011, 2012 and 2013.

Recommendation
The Board, which has been so advised by Investec Bank plc, considers that the proposed Transaction is fair and reasonable as far as the Shareholders are concerned. In giving its advice, Investec Bank plc has taken into account the Board's commercial assessment of the proposed Transaction. Dr Danko Koncar, a director of Kermas, and his wife, Dr Jelena Manojlovic have not participated in the Board's consideration of the Transaction due to their relationship with Kermas.

The Board considers that the Transaction is in the best interests of the Company and its Shareholders as a whole. Accordingly the Board recommends that shareholders vote in favour of the Resolution to be proposed at the Annual General Meeting, as each Director (except Dr Danko Koncar, who does not own any shares in the Company, and Dr Jelena Manojlovic, who owns 150,000 shares representing 0.06 per cent. of the existing issued ordinary share capital of the Company (excluding Shares held in treasury)) intends to do in respect of his own beneficial holdings which amount in aggregate to 7,908,199 Shares, representing approximately 3.24 per cent. of the existing issued ordinary share capital of the Company (excluding Shares held in treasury) as at Monday 16 April 2012.
Under the Listing Rules, Kermas is precluded from voting in relation to the Transaction. Kermas will not vote on the Resolution and has undertaken to take all reasonable steps to ensure that its associates will not vote on the Resolution. Dr Jelena Manojlovic will not vote on the Resolution and has undertaken to take all reasonable steps to ensure that her associates will not vote on the Resolution.

Full details of the transaction are detailed in the Circular which will be available on the Company's website: www.ruukkigroup.com.


RUUKKI GROUP PLC
Thomas Hoyer
CEO


For additional information, please contact:

Ruukki Group Plc
Thomas Hoyer, CEO, [phone], [e-mail]
Markus Kivimäki, General Manager: Corporate Affairs, [phone], [e-mail]

Investec Bank Plc
Stephen Cooper, [phone], [e-mail]

RBC Capital Markets
Martin Eales, [phone], [e-mail]
Peter Barrett-Lennard, [phone], [e-mail]


Ruukki Group is a chrome mining and minerals producer focused on delivering sustainable growth with a speciality alloys business in southern Europe and a ferro alloys business in southern Africa. The Company is listed on NASDAQ OMX Helsinki (RUG1V) and the Main Market of the London Stock Exchange (RKKI).
www.ruukkigroup.com

Distribution:
NASDAQ OMX Helsinki
London Stock Exchange
main media
www.ruukkigroup.com

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