PARIS, Nov 27 (Reuters) - French nickel and manganese group Eramet, which bought a 56 percent stake in Tinfos AS of Norway in July, said on Thursday it was cancelling the last step of the deal, citing the financial crisis. Since the July acquisition, Tinfos was split into two subsidiaries to separate assets relating to electricity production ("Tinfos-Notodden") and the activities relating to the production of manganese alloys and titanium dioxide slag and the trading of metallurgical products ("Eralloys").
This spin-off was completed on Nov. 25, 2008, Eramet said. But because the financial crisis has slammed its share price, "the conditions of the exchange of shares with Halvor Holta Holding could no longer be met," the company said in a statement.
"As a result, the final phase of the transaction will not occur and the proposed share capital increase of Eramet that would have been made in consideration of the contribution of the Eralloys shares held by Halvor Holta Holding will no longer take place."
The final phase was to include the acquisition by Eramet in late 2008 of 100 percent of Eralloys. It also was to include transfer by Eramet to Halvor Holta Holding, on the acquisition by Eramet in late 2008 of 100 percent of Eralloys.
Another element was transfer by Eramet to Halvor Holta Holding, one of the historical shareholders of Tinfos, of a majority stake in Tinfos-Notodden, with Eramet retaining the remaining 40 percent.
Eramet also said it would not proceed with the proposed buy-out of the other minority shareholders (who hold a stake of approximately 7 percent.
Eramet said it remained the majority shareholder (with a 56 percent stake), alongside Halvor Holta Holding (37 percent) and other minority shareholders of both Eralloys and Tinfos-Notodden, which were fully consolidated in Eramet's financial accounts as of August 1, 2008.
(Reporting by Dominique Vidalon) Keywords: ERAMET

(dominique.vidalon.reuters.com; +33 1 49495432; Reuters Messaging:dominique.vidalon.reuters.com@reuters.net)

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