On November 19, 1997, IBH (wholly owned subsidiary of Fior at that date) undertook a public exchange offering to exchange one ordinary share of IBH for each three outstanding Global Depositary Shares (GDS) of Venezolana de Prerreducidos Caroní "Venprecar", C.A. (subsidiary 71.9% owned by Sivensa at this date). Upon completion of the exchange, Venprecar became a subsidiary 98.4% owned by IBH. As result of the exchange, Sivensa owns 49.7% of the capital stock of IBH and Fior (a 60% owned subsidiary of Sivensa) owns 32.9% of the capital stock of IBH. As part of this transaction IBH exchanged 13,349,847 of its common shares (see Note 10). In November 1997 Sivensa, which beneficially owned 71.9% of the aggregate outstanding Venprecar Ordinary Shares and Class "B" Shares of Venprecar through its wholly-owned subsidiary, Siderúrgica del Caroní "Sidecar", S.A., has contributed its Venprecar shares to IBH in exchange for: (i) the number of new IBH shares that it would have received had it tendered such securities pursuant to the Exchange Offer, plus (ii) an amount of additional new IBH shares as compensation for certain costs and expenses incurred by Sivensa in connection with the Exchange Offer and the establishment of the Joint Venture with BHP to construct the Orinoco Iron plant. Such share contributions were accomplished by Sivensa's contribution of all of the outstanding shares of SVS International Steel Holdings, a Cayman Islands company ("SVS International"), to IBH. Sidecar is a wholly-owned subsidiary of SVS International. Through its ownership of SVS International and its direct ownership of Venprecar Ordinary Shares formerly owned by GDS holders, IBH is the majority shareholder of Venprecar. The transaction in which most of the minority shareholders of Venprecar exchanged their Venprecar shares (26.5% of the total shares) for new shares of IBH, was accounted for separetely and treated under U.S. GAAP as a purchase transaction. The portion of the excess of the purchase price over the book value of the assets acquired which is allocable to the minority interest was US$9.9 million, which includes US$2.7 million of related acquisition costs. This amount was allocated to property, plant and equipment (based on an independent appraisal) and will be amortized over the estimated useful lives of the plant and equipment of Venprecar.