Abakan Inc., a specialist in the advanced coatings markets, has recently announced that it has exchanged 20.5% ownership in Powdermet Inc – taking its total ownership of Powdermet from 24.1% to 3.6% – for the remaining 11.9% stake in its subsidiary, MesoCoat.
Divesting in Powdermet, acquiring MesoCoat
As a result, Abakan has acquired 100% ownership of MesoCoat, along with land and equipment worth US$550 000, the extinguishment of existing inter-company debt of US$486,000, the return of 400 000 outstanding Abakan shares to authorised capital and US$1 million in cash, from Powdermet.
The decision to divest a significant portion of Abakan's ownership of Powdermet is part of a long-term strategy.
Abakan originally purchased a 41% interest in Powdermet, acquiring this from Kennametal Inc. in March 2011 for US$1.7 milllion, of which 37.4% has now been returned to Powdermet in two separate transactions that total approximately US$10 million.
Looking into the future
"Obtaining 100% ownership of MesoCoat along with owning the 5.7 acres of land where our clad pipe manufacturing facility sits and on which we plan to build a 160 tpy PComP powder production facility were some of Abakan's goals for 2015. This transaction also transfers ownership of necessary PComP powder production equipment from Powdermet to MesoCoat, in addition to six cash payments over five months, totalling US$1 million which will be utilised, in part, to fund capital expenses for the PComP facility. PComP testing and recent sales have been very successful so we expect to meet the growing demand for this product with increased production capacity. When constructed, the new plant running at full capacity would be able to increase annual revenues by approximately US$20 million" said Abakan’s CEO, Robert Miller.
Edited from source by Elizabeth Corner