Cranford, New Jersey-based Metalico Inc. has purchased an auto shredder yard in northeast Ohio from the Liberty Iron & Metal subsidiary of Hong Kong-based Chiho Environmental Group.
A recap of the transaction prepared by Chiho for the Hong Kong Exchanges and Clearing Ltd. and The Stock Exchange of Hong Kong Ltd. says the sale was completed Dec. 25, 2020, for $13.2 million. Chiho stock is listed on the Hong Kong Stock Exchange, triggering the disclosure.
The recap states in part, “The seller is Liberty Iron & Metal Inc., an indirectly wholly owned subsidiary of [Chiho]. The buyers are Chloe Girard LLC (Metalico Girard) and Metalico Youngstown Inc. (Metalico Youngstown). The buyers are part of Ye Chiu Metal Recycling (China) Ltd., listed on the Shanghai Stock Exchange [and] one of the largest secondary aluminum producers globally.”
The purchased yard in Girard, which is near Youngstown, Ohio, had been part of the Diamond family-owned Liberty Iron & Metal before it was purchased in part by the Germany-based Scholz Group in 2007 and in entirety by Scholz in 2016. Scholz Group itself was purchased by Chiho in 2016.
Chiho’s December 2020 transaction summary states in part, “The proceeds from the sale will be primarily used to repay existing local bilateral bank loans secured over the [disposed of] assets, hence reducing loans and financial expenses.” Adds Chiho in its recap, “The company conducted an auction sales process for the disposal of assets, and the buyers offered the best price.”
The recap indicates additional Chiho disinvestment could be in the works. “The company has reviewed its geographic footprint and decided to strategically refocus on its Southwest [United States] operations and divest the disposed of assets. The Disposal Assets include certain properties, equipment, and inventory of the shredder facility that the company owns and operate in Ohio [and] Pennsylvania. After the divestment, the company will cease to own and operate the Girard shredder facility.”
In addition to the sold Girard shredder yard, Liberty’s website lists a shredder yard in Erie, Pennsylvania, and another facility in Sharon, Pennsylvania, as remaining eastern U.S. assets. In the Southwest, Liberty Iron & Metal has a shredder yard in Phoenix and another location in Chihuahua, Mexico.