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M&A: Severstal sells coal asset to Canada's Corsa Coal

7027940 Canada Limited, a subsidiary of OAO Severstal, has entered into a definitive agreement with Corsa Coal Corp., a Canadian public company, for the sale of PBS Coals Inc., a metallurgical coal producer located in Pennsylvania, USA, Severstal informed.

The transaction amounting to $140 million is expected to be finalized by mid-August 2014, subject to customary closing conditions. The proceeds from the deal will be used for Severstal's general corporate purposes.

As a result of the transaction, Severstal will receive $60 million in cash and $20 million in a target deposit account to be used as bonding collateral on certain liabilities Severstal assumed under the deal terms.

Corsa Coal Corp. will also assume reclamation and water treatment liabilities totaling approximately $60 million.

The sale of PBS Coals reflects Severstal's commitment to maximize value creation for its shareholders. For Severstal with its current asset portfolio PBS Coals is a business which is not operationally linked to the company's steel plants in Russia and the USA, the statement emphasizes.

OAO Severstal (LSE: SVST, tax number: 3528000597) is an international mining and metallurgical company focusing on high value added products. The company has considerable experience of acquisition and integration of assets in North America and Europe. It also possesses mining enterprises in Russia providing the company's production assets with raw materials. In 2010, the company's revenue was $13,573 million, EBITDA reached $3,263 million, the steel output was 14.7 million tonnes. Severstal also produced 589 thousand ounces of gold at its gold mining assets in Western Africa, Kazakhstan and Russia. The company's shares are listed on the Russian Stock Exchanges RTS and MICEX, its GDRs are listed on the LSE.

IFRS net loss of OAO Severstal for Q1 2014 was $100.202 million against $49.727 million the year before. Revenue decreased by 9.5% to $2.973 billion from $3.285 billion, operating profit grew by 9.04% to $336.108 million from $221.878 million, loss before tax was $125.67 million against a profit of $94.323 million.

According to the DataCapital information retrieval system, RAS net profit of Severstal for 2013 decreased by 44.97% to RUB 8.055 billion from RUB 14.638 billion for 2012. Revenue decreased by 4.79% to RUB 212.898 billion from RUB 223.611 billion, sales profit by 4.21% to RUB 15.062 billion from RUB 15.724 billion, pre-tax profit by 43.88% to RUB 9.17 billion from RUB 16.341 billion.

"AK&M", 18.07.2014


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