15.11.2005
Evraz Group S.A. (LSE: EVR), one of the leading vertically integrated steel production and mining businesses with operations mainly in Russia, today announces the completion of the acquisition of 98.96% of the shares of Vitkovice Steel, the largest platemaker in the Czech Republic, for approximately €240 million.
The acquisition is in line with Evraz Group's stated strategy to achieve growth through focused acquisitions of re-rolling assets outside Russia. Leveraging Vitkovice Steel's position as a producer of high quality steel plate, Evraz will seek to increase its market share and to secure its client base, as well as to capture additional margins from the sale of higher value-added steel products in the European market.
The acquisition was financed by a combination of debt and cash. The debt finance was provided by a bank consortium led by ABN AMRO N.V. and Commerzbank. OSINEK a.s., a 100% subsidiary of the National Property Fund of the Czech Republic, acted as the seller. ABN AMRO N.V. served as a financial advisor.
Commenting, Alexander Abramov, Evraz Group Chairman and Chief Executive Officer, said, "We are very pleased with the completion of the acquisition of Vitkovice Steel, one of the largest steel enterprises in the Czech Republic. We believe that the integration of Vitkovice Steel into Evraz Group will contribute to its development into a world-class business."
For further information:
Evraz Group
Corporate Affairs and Communications
Irina Kibina
Tel: +7 095 232 1370
IR@evraz.com
Merlin
Michael Rummel
Lachlan Johnston
Maria Suleymanova
Tel: +44 207 653 6620
msuleymanova@merlinpr.com
Notes to Editors
Evraz Group S.A.
Evraz Group is one of the largest vertically-integrated steel and mining businesses with operations mainly in Russia. In 2004, Evraz produced 13.7 million tonnes of crude steel.
Evraz's principal assets include three of leading steel plants in Russia: Nizhny Tagil (NTMK) in the Urals region, and West Siberian (ZapSib) and Novokuznetsk (NKMK) in Siberia.
Evraz Group's fast-growing mining businesses comprise Evrazruda, the Kachkanarsky (KGOK) and Vysokogorsky (VGOK) iron ore mining complexes, NeryungriUgol Coal Company and an equity interest in the Raspadskaya coal mine. The mining assets primarily supply Evraz Group's steelmaking operations, enabling the company to be a vertically-integrated steel producer, limiting its exposure to fluctuations in the prices of key raw materials. Evraz obtained over 70% of its iron ore requirements from KGOK, Evrazruda and VGOK in 2004 and also obtains the majority of its coking coal from Raspadskaya and other affiliated producers.
Evraz also owns and operates the Nakhodka commercial sea port, in the Far East of Russia, which facilitates access to Asian export markets.
Vítkovice Steel, a.s.
Vitkovice Steel is the largest platemaker in the Czech Republic, located in the city of Ostrava in the Moravia region. Vitkovice Steel produced 870,000 tonnes of steel products in 2004, mostly high-quality steel plate. It recorded sales of €423 million and earnings before interest, tax, depreciation and amortisation of approximately €57 million in 2004. Vitkovice Steel employs over 1,500 people.
