Mar 21 2008
Evraz Group S.A. announced today that it has decided to terminate the merger negotiations between Yuzhkuzbassugol, a fully owned coal mining subsidiary of Evraz, and Raspadskaya, Russia's second-largest coking coal producer, originally announced in June 2007.
Evraz believes that the proposed merger is not in the best interests of the Group’s shareholders at this time.
Due to the favourable market conditions and recent developments at the Group, which include acquisition of selected production assets in Ukraine, we concluded that further integrating Yuzhkuzbassugol with Evraz’s steel operations and with Ukrainian coke production assets would yield more immediate value and long-term synergies than combining Yuzhkuzbassugol and Raspadskaya businesses.
“Yuzhkuzbassugol and Raspadskaya will provide more value for our shareholders as separate businesses,” said Alexander Frolov, Evraz’s Chairman and CEO. “Yuzhkuzbassugol has already become an important part of our vertically integrated business model. We at Evraz are committed to grow both parts of Yuzhkuzbassugol businesses – metallurgical coal and steam coal mines, capitalising on the significant potential of the company’s existing mines, as well as the new deposits. It is equally important for us that Raspadskaya will remain Evraz’s strategic partner and a reliable supplier of coal to the Group’s mills in Russia”.
Evraz also announced that Gennady Kozovoy has resigned as Yuzhkuzbassugol’s CEO. Andrey Borschevich will become the new acting CEO of Yuzhkuzbassugol, effective March 20, 2008. Mr Borschevich previously worked as Chief Production Officer at Yuzhkuzbassugol and has 25 years of experience in the coal industry.
“We express our sincere gratitude to Gennady Kozovoy for his contributions to Yuzhkuzbassugol,” said Frolov. “In particular, we would like to thank Gennady for implementing strict occupational health and safety standards at our coal mines.”
Posted March 21st,2008