Feb 22 2007
Evraz Group S. A. announced that it has received clearance from the European Commission to acquire sole control of Highveld Steel and Vanadium Corporation Limited, subject to certain conditions. The clearance was received already in the first phase of the antimonopoly investigation process by the European Commission. Under conditions of this clearance, Evraz has committed to divest certain of Highveld's vanadium production facilities and related assets, including the Vanchem Operations located in Witbank, Republic of South Africa, and access to Highveld's Mapochs Mine and its 50% joint venture holdings in South Africa Japan Vanadium (Proprietary) Ltd. Evraz has also committed to maintaining existing vanadium feedstock supply agreements with certain customers.
Evraz is investing in Highveld in order to further diversify geographically in steel production. Through Highveld, Evraz believes it will have access to the growing South African construction sector. The transaction will further ensure a source of local vanadium ore and slag supplies.
In an agreement announced on July 14, 2006, Evraz and Credit Suisse International each purchased a 24.9% stake in Highveld from Anglo South Africa Capital (Proprietary) Limited. Pursuant to that agreement, Evraz has an option to increase its stake in Highveld once regulatory approvals are received, including from competition authorities in South Africa. Evraz has already filed and is waiting for the approvals from the competition authorities in South Africa.
Evraz is entitled, once it receives all regulatory approvals, to purchase Anglo American's remaining 29.2% stake in Highveld as well as Credit Suisse's 24.9% stake through the exercise of separate option agreements. Upon exercise of these options, Evraz will own approximately 79% of all outstanding shares in Highveld and, as a result, will exercise sole control. Under South African law, Evraz will be required to make a mandatory general offer to all shareholders of Highveld after its ownership position exceeds 35%.