19th Jun 2018 11:00
LONDON (Alliance News) - FTSE 100-listed Russian steelmaker Evraz PLC said Tuesday it has gained shareholder approval to provide a guarantee to the obligations of subsidiary EVRAZ Mezhdurechensk under certain management contracts.
Evraz Mezhdurechensk, a unit of the company, is currently incurring penalties of RUB1 million per day, approximately USD16,000, for each of the nine contracts it signed in December, due to its inability to guarantee contract obligations.
The total amount of the penalties that Evraz Mezhdurechensk would incur until the general meeting was up to RUB198 million.
As Evraz Mezhdurechensk is a subsidiary without substantial assets, the contracts require Evraz and JSC EVRAZ Consolidated West-Siberian Metallurgical Plant, to enter into a RUB30 billion joint guarantee of Evraz Mezhdurechensk's obligations under the contracts.
On December 29, Evraz Mezhdurechensk entered into management contracts with nine companies owned by LLC Sibuglemet Group involved in mining, processing and trading coal.
Under the contracts, Evraz Mezhdurechensk has to pay certain amounts to the counterparties by way of liquidated damages if it breaches certain provisions.
Shares in Evraz were down 3.9% at 517.20 pence on Tuesday.
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