Sims Metal Management Releases Special Committee Findings On UK Investigation; Goodwill Impairment
SYDNEY, Australia and NEW YORK, Feb. 14, 2013 (GLOBE NEWSWIRE) -- Sims Metal Management Limited (ASX:SGM) (NYSE:SMS) (the "Company") announced on 21 January 2013 that the Board of Directors had established a Special Committee (the "Committee") to investigate inventory valuation issues in the Company's UK business. The Committee has now concluded its assessment of the impact of the UK inventory write-down. The Committee has determined that a write-down of inventory of $78 million will be required, versus a preliminary assessment of circa $60 million. The write-down adjustment has been independently verified by the Company's external auditor PricewaterhouseCoopers ("PwC"). $16 million of the inventory write-down will impact first half Fiscal 2013 results, and the balance will be reflected in restatement for prior periods results. Details of the Committee findings and impact on the financial accounts can be found in Appendix A.
Additionally, the Company advised the market on 21 January 2013 that a triggering event had occurred which would necessitate an impairment assessment of goodwill as of 31 December 2012. The impairment charges related to goodwill and other intangible assets are, in the aggregate, $354 million. $291 million of this impairment charge relates to North America Metals and will be recorded against the Fiscal 2013 result. $63 million of the impairment charge relates to UK Metals and UK SRS and will be reflected in the restatement of results for prior periods. Further details of the goodwill impairment can be found in Appendix B.
As at 31 December 2012 the Company's net debt to total capitalisation, post goodwill and other intangible asset impairments, was 13%.The Company will be amending its Form 20-F for impacted periods, and will be filing amended 20-F's with the Securities and Exchange Commission ("SEC") as soon as practicable. The Company currently believes that it will restate its results for the periods of Fiscal 2012, 2011, and 2010.
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