Corus sells aluminium businesses

Corus will be able to cut its £1.68bn debt pile

Steel group Corus is planning to cut its debt mountain after selling its two main aluminium businesses.

The proposed sale to Pechiney secures the future of our aluminium businesses

Tony Pedder, Corus chief executive

French aluminium producer Pechiney has agreed to pay £543m (861m euros; $841m) for the companies.

The sale includes plants in Germany and Belgium as well as interests in joint ventures in Canada and China.

The businesses convert aluminium ingots into products such as rods and sheets which are used in the aerospace, car and construction industries.

Key markets

Corus chief executive Tony Pedder said: "As well as providing good value to Corus, the proposed sale to Pechiney secures the future of our aluminium businesses."

Pechiney's chairman and chief executive Jean-Pierre Rodier said it was a good deal for his company too.

"This transaction provides Pechiney with a unique opportunity to develop in the aluminium conversion business, especially in our two key markets - aerospace and automotive," Mr Rodier said.

Corus announced in March that it was selling its aluminium interests to focus on steel.

After this latest sale it will be left with two smelters in the Netherlands and Germany, but the company said it was talking to possible buyers.

Competitive market

Last month the company announced a loss of £234m in the six months to the end of June.

It said it was hit by the world economic slowdown, by low worldwide steel prices and by the United States' decision to charge tariffs on steel.

At the end of June, Corus' debt stood at £1.68bn.

Corus shares initially rose more than 7% on Wednesday, but fell back in later trade to close up 4.8% at 44p.