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M&A: Severstal is selling two steelmaking facilities in USA for $2,325 million

OAO Severstal is selling two steel works in the USA for $2.325 billion, according to the company's press release.

Severstal has signed binding agreements for the disposal of Severstal Columbus to Steel Dynamics and of Severstal Dearborn to AK Steel. Severstal Columbus and Severstal Dearborn are parts of the company's Severstal North America arm.

Completion of the sale is subject to customary closing conditions, including expiration of the Hart Scott Rodino Antitrust Improvements Act waiting period. The closing of the transaction is not subject to any financing conditions and is expected to be realized by year-end 2014.

Evercore and Citigroup acted as financial advisors to OAO Severstal. Skadden, Arps, Slate, Meagher & Flom LLP acted as OAO Severstal's legal advisor.

Earlier, on July 15, Severstal arranged for the sale of Corsa Coal Corp. (also located in the U.S.) for $140 million.

According to Bloomberg, the decision to shake off the U.S.-based assets was motivated by the building tension between the USA and Russia. Severstal was not hit by the U.S. sanctions, although Alexey Mordashov's company held a 6% in the sanctioned Bank Rossiya (JSB Rossiya) as of April 2014.

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 acquisitions and integrations of assets in North America and Europe. It also possesses mining enterprises in Russia providing the company's production assets with raw materials. 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 loss of Severstal for Q1 2014 grew 8.47 times to RUB 9.025 billion from RUB 1.066 billion the year before. Revenue decreased by 1.28% to RUB 52.186 billion from RUB 52.863 billion, sales profit grew 2.06-fold to RUB 4.917 billion from RUB 2.391 billion, loss before tax 15.02-fold to RUB 11.038 billion from RUB 735.097 million.

"AK&M", 22.07.2014


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