Evraz Buys Out Key Assets of Ukrainian Privat for $3bn
Evraz Group is buying from Privat Group steel, mining, coke and chemical assets in Ukraine. As the deal of roughly $3 billion will be partially paid by the stocks of Evraz, Privat will get about 10 percent in it in the end.
Evraz Group announced yesterday that it entered into an agreement to acquire some enterprises in Ukraine, including 99.25 percent in GOK Sukhaya Balka (3.75 million tons of sintering ore a year), 95.57 percent in Dnepropetrovsk Iron and Steel Works (1.8 million tons of cast iron and 1.23 million tons of steel), 93.74 percent of Bagleikoks Coke and Chemical Works, 98.65 percent in Dneprokoks and 93.83 percent in Dneprodzerzhinsk Coke and Chemical Works. The overall annual capacity of coke and chemical enterprises is estimated at 3.52 million tons of metallurgical coke.
The name of the seller hasn’t been officially disclosed, but the assets are said to belong to Privat Group of Igor Kolomoisky and Gennady Bogolyubov. Evraz said it would pay for the assets both by money and by new stocks. The deal that is to be completed in the first quarter of 2008 is yet to be approved by Evraz BOD in view of independent assessment.
The amount will be above $3 billion, said Timur Novikov, first deputy board chairman at PrivatBank (Privat Group). Of it, $1.7 billion will be settled by money, while the stocks of Evraz will cover the remainder. Privat will get a bit less than 10 percent in Evraz, Novikov specified.
Given that the LSE capitalization of Evraz was $30.43 billion yesterday, the sale of 10 percent for $1.3 billion to $1.5 billion means the discount of at least 50 percent. But a source familiar with the deal doubted Novikov’s words, specifying that Evraz would pay at price that is “more than reasonable.” Regardless, the GDRs of Evraz lost 3.02 percent in London yesterday.
www.kommersant.com
All the Article in Russian as of Dec. 12, 2007
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