4th Apr 2014 07:04
LONDON (Alliance News) - Evraz PLC Friday said it has signed and closed the sale of its subsidiary Evraz Vitkovice Steel (EVS) to a group of private investors for USD89 million.
The Russian steel maker said the subsidiary was sold to Martinley Holdings Ltd, Nabara Holdings Ltd, Vitect Services Ltd, Hayston Investments Ltd, and Dawnaly Investments Ltd, with each acquiring 20% holdings.
The company said the payment for the deal was adjustable for the actual level of EVS's working capital, and the buyers also have assumed USD198 million of its debt liabilities, including the repayment of USD128 million of Evraz's inter-company debt.
Evraz said it will apply the sales proceeds for general corporate purposes, including the repayment of some of its debt.
EVS has been part of Evraz since November 2005 and manufactures steel rolled products in Czech Republic, producing 571,000 tonnes of steel products in 2013.
The subsidiary generated USD442 million in revenue from continuing operations in 2013 and, as of December 31 2013, had gross assets of USD278 million.
The company said that it believes the sale will not affect production at EVS or the composition and number of its 1,000 strong workforce.
"We continue to focus on streamlining our business, concentrating management's efforts on the key assets and deleveraging. The disposal of Vitkovice Steel is part of that strategic initiative," Evraz Chief Executive Alexander Frolov said in a statement.
Evraz also disposed of its loss-making Gramoteinskaya thermal coal mine in October and said at the time that it was also putting its focus on developing its coking coal mines for steel-making.
Evraz shares were up 0.7% at 76.50 pence at the open Friday.
By Tom McIvor; [email protected]; @TomMcIvor1
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