Management decided in 2014 to build this plant and expected total costs to amount to €550m. However, additional environmental requirements plus construction delays and the appreciation of the US currency have resulted in an increase to some €925m. The currency movement alone contributed some €135m to the cost overrun. However, the plant was overwhelmingly financed in US$ and only a small share was financed via equity which was hedged at the historic exchange rate of a good $1.3
11 May 2017
Substantial cost overrun for direct reduction plant in USA
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Substantial cost overrun for direct reduction plant in USA
voestalpine AG (VOE:WBO) | 0 0 0.0% | Mkt Cap: 8,355m
- Published:
11 May 2017 -
Author:
Hans-Peter Wodniok -
Pages:
2
Management decided in 2014 to build this plant and expected total costs to amount to €550m. However, additional environmental requirements plus construction delays and the appreciation of the US currency have resulted in an increase to some €925m. The currency movement alone contributed some €135m to the cost overrun. However, the plant was overwhelmingly financed in US$ and only a small share was financed via equity which was hedged at the historic exchange rate of a good $1.3