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Russky Ugol Buying Steel-Smelting Assets at Large
Rusky Ugol (Russian Coal) is finalizing the deal to buy out the majority stake in Zlatoustovsk Metallurgical Works. Once the deal is completed, Russia’s fifth producer of coal will enter the league of the top ten steelmakers of the country.
Russky Ugol CEO Vadim Varshavsky told Kommersant October 5, 2005, his company’s stake in Zlatoustovsk Metallurgical Works widened from 25 percent to 60 percent. Although Varshavsky refused to disclose the deal budget, Kommersant found out it was around $40 million. The stocks’ seller – Mark Leivikov – confirmed Russky Ugol has the option to buy out the majority stake in the works but specified the deal has not been legally executed yet.
Zlatoustovsk Metallurgical Works made 330,400 tons of steel from January to July of this year and posted rolled metal output of 234,300 tons. The revenues stood at around 4 billion rubles. Mark Leivikov controlled the 100 percent of the works till August 2005.
Russia’s fifth coal producer, Russky Ugol has five metallurgical plants already with the aggregate output of more than 1.4 million tons of rolled metal on year. Varshavsky expects the metallurgical plants to account for around a half of the forecasted annual revenues of $1.2 billion.
It appears Zlatoustovsk Metal Works won’t be the last metal acquisition of Russky Ugol. The next candidate for takeover is Gurievsk Metallurgical Works. Varshavsky’s companies bought out the 25 percent in the above works in June but withdrew from the stock capital two months later till modernization completion, pledging to buy out the 75 percent in it in the end. The metal analysts say Varshavsky will have to pay from $23 million to $25 million for the stake.
www.kommersant.com
All the Article in Russian as of Oct. 06, 2005
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