In June, Evraz Group President Alexander Abramov promised to close the deal for buying out a stake in Italian Palini e Bertoli before the end of the month.
Photo: Dmitry Dukhanin
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Evrazholding Buys Italian Arrears to Get Access to Rolled Metal Market
Evrazholding announced Friday it completed the deal to buy out 75 percent plus a stock in Italian Palini e Bertoli S.p.A. The budget was around ˆ72 million, Kommersant found out. Evrazholding got Palini burdened by around ˆ20-million debt of the previous owners. But Palini's purchase enables Evrazholding, first, to diversify the steel business, second, to escape restrictions for Russian steel shipment to Europe.
Evraz Group S.A. (holder of Evrazholding assets) sealed a non-binding memorandum with Palini e Bertoli to buy out the stake of 75 percent plus a stock in Italian metal maker on May 11, 2005. On June 21, Evraz Group President Alexander Abramov told Kommersant “the deal will be closed before late month,” i.e. before June 30. However Abramov failed to complete negotiations with Italian partners in time. Palini holders had attracted loans for production upgrading and Evrazholding had to consult with the creditors as to the liabilities restructuring once the owner would be changed.
Evrazholding announced Friday it finalized the deal for Palini’s acquisition, not disclosing the buyers names or the budget. The deal value is around $90 million (ˆ72.4 million), according to Italian party to the deal. Sources with the companies affiliated to the former holders of the enterprise specified 49 percent of Palini's stocks were bought out from MPS Venture, 26 percent of stocks – from four top managers of the company. Evrazholding paid by its own money and by the funds raised with ABN AMPO N.V.
According to sources familiar with the deal, Palini has ˆ20 million in arrears. But in Evrazholding, they don’t think they have bought at a loss – the above amount was spent to upgrade Palini, therefore, there is no need to invest in renewal program.
For Evrazholding, the above purchase means guaranteed sales market for slab deliveries and enables it to name a metal sheet maker as part of its enterprises (Evrazholding has confined to graded rolled metal before the deal). And last but not the least, having bought Palini e Bertoli, Evrazholding has paved the way to the plate steel market of Italy despite the 2-million ton annual quota for steel/rolled metal deliveries set forth in the Russian-Italian agreement. “Palini e Bertoli’s acquisition is in line with our strategy for improving business efficiency by buying top-grade rolled metal facilities abroad,” Abramov specified.
www.kommersant.com
All the Article in Russian as of Aug. 15, 2005
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