Evraz Plc (EVR) - EVRAZ will sell EvrazTrans to NefteTransService
RNS Number : 8326R
22 November 2012
EVRAZ announces an agreement to sell EvrazTrans to NefteTransService
22 November 2012 - EVRAZ plc (LSE: EVR) ("EVRAZ") announces that it has today
signed an agreement for disposal of its Russian railcar operating subsidiary
EvrazTrans to Russian freight rail operator NefteTransService ("NTS") for
RUB9,450million (approximately US$300million) cash consideration on the
basis of RUB150 million (approximately US$4.8million) of working capital, no
cash and no debt. Completion is subject to receipt of certain customary
corporate approvals and delivery by NTS of relevant authority approvals and is
expected to take place by the end of 2012.
EVRAZ will apply the sales proceeds for general corporate purposes, including,
but not limited to, the repayment of some of its debt.
Under the contract with NTS, EVRAZ has agreed to sell its participatory
interest in the share capital of EvrazTrans, the owner of 4,114 gondola cars
with an average age of 5.5 years. EVRAZ will retain ownership of and continue
to operate hoppers previously owned by EvrazTrans.
As at 31 October 2012, EvrazTrans had gross assets, which are the subject of
the transaction, of US$243million (under Russian GAAP). For the financial
year ended 31 December 2011, EvrazTrans gondola business produced a profit
before tax of US$49.8million, according to EVRAZ management estimates. This
figure reflects results of operation of EvrazTrans gondola business as a
captive rail freight operator to EVRAZ and is not representative of EvrazTrans
gondola business operations on a stand-alone basis.
EVRAZ has also signed a five-year off-take service contract with NTS in
respect of approximately 30% of EVRAZ's rail transportation requirements. The
services provided by NTS to EVRAZ will be at market prices negotiated
Alexander Frolov, EVRAZ's CEO, said,
"The sale of EvrazTrans is in line with EVRAZ's strategy of divesting non-core
assets. The recent transactions in the rail cargo transportation sector in
Russia are evidence that this market is now undergoing consolidation. The
divestment of EvrazTrans will unlock the value of the asset for EVRAZ while
the long-term off-take service agreement will guarantee continuity of services
for transporting EVRAZ's products."
For further information:
VP, Corporate Communications
London: +442078328998 Moscow: +74959376871
London: +442078328990 Moscow: +74952321370
EVRAZ is a vertically integrated steel, mining and vanadium business with
operations in the Russian Federation, Ukraine, USA, Canada, Czech Republic,
Italy and South Africa. EVRAZ is among the top 20 steel producers in the world
based on crude steel production of 16.8 million tonnes in 2011. In 2011 EVRAZ
sold 15.5 million tonnes of steel products. A significant portion of the
company's internal consumption of iron ore and coking coal is covered by its
mining operations. The company's consolidated revenues for the year ended 31
December 2011 were US$16,400 million and consolidated EBITDA amounted to
US$2,898 million. The H12012 consolidated revenue was US$7,619million and
the H12012 EBITDA was US$1,175million.
This information is provided by RNS
The company news service from the London Stock Exchange
DISBUBDBUSDBGDD -0- Nov/22/2012 15:47 GMT
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