RUUKKI GROUP ANNOUNCES SETTLEMENT OF THE DISPUT...

14:45 London, 16:45 Helsinki, 11 October 2012 - Ruukki Group Plc, Stock Exchange Release

RUUKKI GROUP ANNOUNCES SETTLEMENT OF THE DISPUTE REGARDING MOGALE ALLOYS

Ruukki Group Plc ("Ruukki" or the "Company") is pleased to announce that it has agreed to settle its dispute with the vendors (the "Vendors") of Mogale Alloys acquired by Ruukki in May 2009. The completion of the settlement remains subject to certain conditions.

As outlined in the original acquisition agreement, 30% of the total purchase price (ZAR 600 million or approximately EUR 51 million) was conditional and deferred upon certain conditions being met. As announced on 24 September 2010 the Vendors  commenced legal actions in South Africa against the Company relating to the remaining ZAR 600 million, along with a claim for interest of ZAR 88.2 million (EUR 7.7 million).

The parties have now agreed to settle all outstanding disputes and claims by an arrangement whereby inter alia:

- The parties will terminate all pending legal proceedings in relation to the disputes and will undertake not to institute any further legal proceedings in relation to the acquisition and related matters
- The Vendors will transfer their entire remaining shareholding in Mogale Alloys to Ruukki, whereby Ruukki's ownership will increase from 84,9% to 90,0%
- Ruukki will pay the Vendors an aggregate cash amount of ZAR 175 million (EUR 15 million) and issue, in the aggregate, up to 16,000,000 new shares.
        - In maximum 3,478, 261 of the new shares will be issued as free shares.
- The remaining part of the shares will be issued with a subscription price of EUR 0.50 per share to be paid by set-off against the settlement of receivables related to the Mogale Alloys acquisition. The share issue will be executed based on Board's existing authorization
- After the arrangement has been completed the parties will have no surviving rights or obligations towards each other

The arrangement is conditional upon the completion of, inter alia, the above referred actions no later than on 19 October 2012 (save for the share issue) or such later time as maybe agreed in accordance with the provisions of the settlement agreement. Ruukki will publish a separate release when the conditions are fulfilled.

The issue of the shares to the Vendors is conditional upon the receipt of South African Reserve Bank approval, which is expected to take up to 90 days. If this is not received, Ruukki has undertaken to procure that the shares are disposed of at fair value in accordance with the instructions of the Vendors and the resultant proceeds paid to the Vendors.

Once completed the arrangement will have the following impact on Ruukki's balance sheet:

• Debt will decrease by approximately EUR 51 million 

• Cash will decrease by approximately EUR 15 million 

• Goodwill will decrease by approximately EUR 25 million 

• Other receivables will decrease by approximately EUR 4 million 

• Equity will increase by approximately EUR 6 million 

Ruukki currently has 248,432,000 shares in issue (including treasury shares). If the arrangement is completed the number of shares will increase by up to 16,000,000 from the current level.

The arrangement will not have a material impact on the Company's 2012 financial result.

Thomas Hoyer, CEO, comments: "I am delighted with our agreement with the Mogale vendors. Subject to the completion of this arrangement we hereby end a long and cumbersome legal process and can now focus all our energy on further developing our businesses. In addition, as part of the arrangement, we will widen our shareholder base to include South African holders. I warmly welcome Metmar and the other new shareholders as investors in Ruukki."  


RUUKKI GROUP PLC
Thomas Hoyer
CEO


About Mogale Alloys

Mogale operates four furnaces; two submerged arc furnaces and two DC furnaces, with a total production capacity of 110,000 tonnes per annum. These furnaces are capable of producing four key products: silico manganese, plasma ferrochrome, charge ferrochrome and stainless steel alloy (chromium-iron-nickel alloy).

Mogale Alloys forms a material part of Ruukki FerroAlloys segment. The segment's revenue for the year ending on December 31, 2011 was EUR 75.4 million, EBITDA was EUR -3.9 million and the operating profit (EBIT) EUR -14.0 million. The segment's assets were EUR 219.2 million.

The parties to the settlement agreement are the following: Ruukki South Africa (Proprietary) Limited, Mr. Johan Frederik Oosthuisen, Metmar Limited, Gujo Investments (Proprietary) Limited, Corocap Investments Limited, The Ferguson Family Trust, Sebeso Beneficiation (Proprietary) Limited, Leswikeng Minerals and Energy (Proprietary) Limited, PGR Manganese (Proprietary) Limited, PGR 17 Investments (Proprietary) Limited, Dezzo Trading 184 (Proprietary) Limited, Mogale Management Incentive Trust and Mogale Alloys Trust.


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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Source: Ruukki Group via Thomson Reuters ONE

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