Corus in £360m Finnish sell-off

CORUS has taken another step in the push to focus on its core steelmaking operations with the sale of its 23.2% stake in Finnish stainless steel producer AvestaPolarit for e555m (£360m).

The former British Steel said that the proceeds from the sale to Finnish metals giant Outokumpu, which is subject to European Commission approval, would be used to cut debt. AvestaPolarit contributed a £6.8m pre-tax profit to the Corus results for last year and was carried on the British company's books at £348m.

'The disposal realises our investment at a good price, increases the focus of our activities and provides us with financial flexibility to enhance our core business in carbon steel products and services,' said Corus chief executive Tony Pedder.

Outokumpu already owned 55.3% of AvestaPolarit, whose shares have soared 59% since listing in Stockholm in January last year.

The sale comes as Corus considers bids for its aluminium assets, believed to be worth up to £1bn. Alcoa, Alcan, Norsk Hydro and French metals group Pechiney is known to be among as many as 10 bidders. Corus shares have doubled from a low of 40p since last September amid signs of a recovery in European steel prices and, more recently, a softer pound.

The improving market has been attributed to lower inventories and hopes of recovery on the Continent. Steel's renewed buoyancy compares with a lacklustre performance by aluminium prices, which have struggled to recover from the impact of 11 September.