Business
Intention to sell South African steel mill
Intention to sell South African steel mill.
About this update from Evraz Plc
[{"type":"text","content":"\n \nRNS Number : 0613B Evraz Plc 27 March 2013 \n \n\n \nEVRAZ ANNOUNCES INTENTION TO SELL ITS SOUTH AFRICAN STEEL MILL\n \nMarch 27, 2013 - EVRAZ plc (LSE: EVR) (\"EVRAZ\" or \"the Company\") announces the signing of a non-binding term sheet in respect of the proposed sale of its 85% stake in EVRAZ Highveld Steel and Vanadium Limited (\"EVRAZ Highveld\") to Nemascore (Pty) Ltd, black economic empowerment consortium, for an indicative cash consideration of approximately US$320 million (the \"Transaction\"). EVRAZ will utilise the sale proceeds for general corporate purposes. \n \nEVRAZ Highveld is a vertically integrated iron ore steel and vanadium slag producer. Steel and vanadium slag are produced at the integrated steelworks situated in eMalahleni, Mpumalanga with ore for the steelworks obtained from the Mapochs Mine in the Roossenekal area, Limpopo. As at 31 December 2012, EVRAZ Highveld had gross assets of R3,667 million (approximately US$396 million). For the financial year ended 31 December 2012, EVRAZ Highveld produced a loss before tax of R300 million (approximately US$32 million). \n \nThe Transaction will be the largest black economic empowerment transaction in the South African steel sector to date. The Transaction is subject to standard due diligence procedures and the conclusion of a formal agreement, the implementation of which will be subject to requisite regulatory approvals. The parties expect the Transaction to be executed and completed in the course of Q2 2013. The parties have agreed upon a transition period during which EVRAZ will support the management of EVRAZ Highveld to ensure stable operations and a smooth transfer of the business. \n \n\"EVRAZ Highveld has always been an important investment of the Company\", - said Alexander Frolov, CEO of EVRAZ. \"Our decision to divest the asset will allow us to enhance the Company's focus on our key steel markets in Russia and North America. The transaction will allow EVRAZ to further develop our strategies of continuous operational improvement and building a growing vertically integrated business. We do not expect the transaction to affect EVRAZ's leading position in the global vanadium markets. Our future growth in vanadium is based on an integrated business model that involves ou...