May 9 (Bloomberg) -- Eurasian Natural Resources Corp., the ferroalloys producer that’s lost 40 percent of its value in a year, said first-quarter output declined 2.9 percent because of maintenance at its Aksu plant.
Production of saleable ferroalloys, used in steelmaking, dropped to 364,000 metric tons from 375,000 tons a year earlier, the London-based company said today in a statement. Sales decreased “slightly” from a year earlier as average ferroalloy prices slipped 10 percent, it said.
ENRC has seen its shares slide as the U.K. probes bribery allegations against a Kazakh unit and anti-corruption groups question the company’s dealings in the Democratic Republic of Congo. The stock jumped 27 percent on April 19 after shareholder Alexander Machkevitch said he’s studying making an offer for the company with his two fellow founders and the Kazakh government. The group has until May 17 to make a proposal.
“The board of ENRC reiterates the fact that it has not received any proposal which could result in an offer or possible offer for the group,” the company said in today’s statement.
ENRC dropped 2.4 percent to 296 pence in London trading at 8:23 a.m.
“The imposed May 17 deadline means some timing structure has been given to the deal, however we see scope for timing extension, and deal financing remains a key question,” Liberum Capital Ltd. analyst Ash Lazenby wrote in a note to clients.
First-quarter iron-ore production declined to 3.4 million tons from 3.9 million tons, ENRC said. Saleable ferrochrome output fell 2 percent to 289,000 tons. Planned repairs to a furnace at the Aksu smelter in Kazakhstan are now complete, it said.
“Iron ore was significantly below expectation due to severe weather conditions, which reduced mining and processing rates,” Liberum’s Lazenby said. Production was “relatively weak in key divisions” in ENRC’s first quarter, he said.
ENRC also produces aluminum and power in Kazakhstan, and owns copper and cobalt mines in Africa. Production of saleable copper increased to 14,537 tons in the quarter from 8,988 tons, according to the statement.
The Frontier mine in the DRC was commissioned in April and will reach full capacity in July, ENRC said.
The company plans capital expenditure of about $1.3 billion this year, it said in the statement. Net debt was $5.5 billion at the end of March.
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