Russian mining company Evraz has announced it will end negotiations over a merger between Yuzhkuzbassugol, a fully-owned coal mining subsidiary of Evraz, and Raspadskaya, Russia's second-largest coking coal producer.
It has been decided that the merger, originally proposed in June 2007, is not in the best interests of the group's shareholders at this time.
In an official statement, the company explained that due to favourable market conditions and recent developments, including the acquisition of selected production assets in Ukraine, it decided that integrating Yuzhkuzbassugol into Evraz’s steel operations and with the Ukrainian assets would produce more immediate value.
"Yuzhkuzbassugol and Raspadskaya will provide more value for our shareholders as separate businesses,” comments Alexander Frolov, Evraz’s chairman and CEO.
“Yuzhkuzbassugol has already become an important part of our vertically integrated business model,” he adds.
He added that it is of equal importance to Evraz to ensure Raspadskaya remains a strategic partner, and reliable supplier of coal to the company’s mills in Russia.
Evraz is still in the market with its US$3.214bn structured multi-tranche credit facility raised to finance last year’s acquisition of Oregon Steel Mills in the US. The deal has already signed, funded and fully underwritten by the mandated lead arrangers at the end of 2007, and is entering the final couple of weeks of general syndication. (Click here to read previous coverage, GTR eNews, February 21, 2007)
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