Voestalpine in Advanced Discussions to Sell a Majority Share in a Texas Factory

The company said that negotiations were advanced, but declined to disclose a possible selling price.

Voestalpine announced intentions to spend 550 million euros in Corpus Christi in 2013 to build a state-of-the-art factory.

The $1 billion factory near Corpus Christi began operations in October 2016 with an annual capacity of 2 million tonnes of high-quality hot briquetted iron, or sponge iron, a precursor material used in the manufacturing of steel.

The factory, however, has subsequently encountered problems ranging from construction delays to cost overruns of more than a billion dollars, as well as a hostile market environment in the wake of the COVID-19 outbreak.

Following write-offs, Chief Financial Officer Robert Ottel said in November 2020 that the Texas business was worth 448 million euros.

Voestalpine recorded a 163 million euro impairment loss on its Texas operations for the 2020-21 fiscal year, as the company faced "much weaker" demand.

However, the Texas factory benefitted from "strong demand for steel in North America" during the first three quarters of its current fiscal year 2021-22, the Austrian business said in February, when it anticipated full-year profitability throughout the group at the higher half of its prediction.