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The Story of Stemcor - The Financial Times

Steel News - Published on Sun, 28 Jul 2013

The Financial Times reported that a fight between the Jindal brothers about who will buy steel trader Stemcor’s USD 800 million Indian assets has dragged the London based company into the public arena, which it has happily ignored since it was formed by a German immigrant in 1951.

German immigrant, founder, Mr Hans Oppenheimer, was raised in a middle class Jewish family in Stuttgart before the second world war. A job with his uncle took him to Alexandria, the Egyptian port, before he and his young family settled in Orpington, a small town nestled in London’s commuter belt in 1949.

Mr Oppenheimer set up Coutinho, Caro & Co (London) a JV with a German steel trading company of the same name.

Mr Oppenheimer’s only son, Mr Ralph, took over as chief executive in 1982. Under the younger Oppenheimer’s control, the family business expanded rapidly. It morphed from Coutinho Caro and Co into Stemcor a contraction of Steel Marketing Corporation in 1987, after the Oppenheimer family bought out a stake owned by its joint venture partner, US construction group McDermott International.

That gave the family complete control of its steel business which spans trading, finance, provision of raw materials, and stockholding for the first time. Turnover reached GBP 1 billion in 2000 and then GBP 4 billion 7 years later, as the global steel industry rode China’s seemingly insatiable demand for the metal. In its last financial year, revenues were GBP 5.1 billion making it the UK’s 6th largest private company by sales, even as it fell to a pre-tax loss of GBP 23 million.

Stemcor had relied on debt to fuel its expansion and, by 2013, its short term credit facility stood at USD 1.2 billion. However, as the price of steel dropped, so did the desire of Stemcor’s banks to provide funding to the business. As the need to restructure the business increased and demands by Stemcor’s banks to pay down its net debt became louder, the company appointed Goldman Sachs to sell some of its Indian assets. Mr Julian Verden new CEO of Stemcor was brought in this year to oversee this process the first time someone not called Oppenheimer had led the company.

Source - The Financial Times


Posted By : admin on Sun, 28 Jul 2013
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