Sims Metal Management Limited has announced restructuring initiatives designed to reset and streamline the Sims Recycling Solutions ("SRS") business as part of a Group strategic review currently being undertaken.
The review has determined certain loss making assets to be outside of the strategic long-term interests of the Company.
These operations include a substantial portion of SRS in the UK and all of SRS in Canada. Legislation and market dynamics in the UK and Canada have resulted in these businesses being commercially unattractive to the Company going forward. The Company will redirect its capital and resources instead to other portions of the global businesses that are more attractive as it continues to develop its platform for SRS customer relationships worldwide.
The Company's UK Metals operations, fridge recycling and IT asset management solutions are core and therefore not impacted by the restructuring activities. SRS operations outside of the UK and Canada are also core and therefore not impacted by the restructuring activities.
The Company expects to recognise restructuring charges of circa $80 to $85 million of which the non-cash portion relates primarily to fixed asset impairment and is circa $35 million. The restructuring charges will be recorded as significant items in the Company's second half results of FY14.