29th May 2018 14:31
LONDON (Alliance News) - Steelmaker Evraz PLC said Tuesday it will seek shareholders' approval in order to guarantee its unit obligations under a contract and avoid paying fees.
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 will incur until the date of the general meeting will equal RUB198 million.
As Evraz Mezhdurechensk is a subsidiary without substantial assets, the contracts require the 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.
Evraz shares were trading up 0.3% at 479.80 pence.
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