Mordashov’s Severstal Weighs Options for U.S. Steel PlantsYuliya Fedorinova
OAO Severstal, the Russian steelmaker controlled by billionaire Alexey Mordashov, said it is considering “a range of strategic options” for its North American unit amid reports the business may be sold.
“No decision has yet been taken as to which, if any, such option might be pursued,” the Cherepovets-based company said in a regulatory statement today.
Severstal is assessing offers for its plants in Dearborn, Michigan, and Columbus, Mississippi, people familiar with the matter said May 10, asking not to be identified because the deliberations are private. The bidders include U.S. Steel Corp. and number more than two, these people said today.
Spokeswomen from U.S. Steel and Severstal declined to comment.
The U.S. sites have total annual capacity to produce 5.2 million metric tons of steel. The Russian company has invested more than $2 billion in the assets since 2004.
Cia. Siderurgica Nacional SA has made an approach for the assets, for which Severstal may receive as much as $1.5 billion, according to a May 9 report in the Wall Street Journal. A spokesman for Sao Paulo-based CSN declined to comment today.
Severstal has advanced 7 percent this week to $8.81 in London trading, the highest close since Jan. 23.
“A deal closed at $1.5 billion would boost Severstal’s market capitalization as it would mean that its American assets have a higher valuation in terms of multiples compared with the parent company,” Kirill Chuyko, the Moscow-based head of equity research for BCS Financial Group, said yesterday.