Metalloinvest Ready to Buy 20% Stake From VTB, Moody’s Says

Metalloinvest (METIN), the Russian iron-ore producer controlled by billionaire Alisher Usmanov, may shortly buy the 20 percent of its stock held by VTB Group, according to Moody’s Investors Service.

Metalloinvest could acquire the stake from VTB, Russia’s second-biggest lender, for about $2.5 billion in cash, Moody’s analysts Denis Perevezentsev and Steven Oman said in a report.

“The pace of Metalloinvest’s cash accumulation thus far in 2012 would appear to point to such a pending transaction,” Moody’s said.

The iron-ore producer, which had $1.2 billion in cash at the end of 2011, drew down $916 million of revolving bank debt in January and issued $850 million of ruble bonds in March, Moody’s said. Metalloinvest got $540 million from the sale of its railroad transportation unit to Globaltrans Investment Plc. (GLTR)

Usmanov, Russia’s richest man, said April 27 that the company may study buying back VTB’s stake and is in preliminary talks with the bank.

Metalloinvest and VTB declined to comment when contacted by Bloomberg.

To contact the reporter on this story: Ilya Khrennikov in Moscow at

To contact the editor responsible for this story: John Viljoen at

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