WORLD HEADLINESWorld
Metinvest Group, Ilyich Steel Plant to Consolidate Assets
Jul. 2, 2010 Ilyich Steel Plant and Metinvest Group decided to merge assets following talks about potential cooperation and consolidation of efforts to overcome the consequences of the global financial crisis. The aggregate production potential after the consolidation will be 20 million tonnes of steel per year.
The partnership will include all businesses of Ilyich Steel Plant with OSC Ilyich Iron and Steel Works of Mariupol being the major asset. Metinvest Group will join the partnership with its Ingulets Ore Mining and Processing Plant, Krasnodonugol mining group, Avdeyevka Coke and Chemical Plant, and Khartsyzsk Pipe Plant, as well as provide an investment of USD 2 billion to modernize the Ilyich Plant.
After completion of the merger, Metinvest Group’s share will be 75%, while 25% will remain under control of Ilyich Steel Plant headed by Vladimir Boyko. The companies note that further steps and the final format of the partnership will be clear after the legal examination is over and all permissions of regulatory agencies in Ukraine and internationally have been obtained.
Metinvest Group will acquire additionally issued shares of Ilyich Stal and OSC Ilyich Iron and Steel Works of Mariupol as a first step in the merger process.
“The partnership with Ilyich Plant is an important step in the realization of our long-term strategy aimed at strengthening the vertical integration of Metinvest and achieving the maximum increase in production of high-quality yet low-cost steel,” said Igor Syry, CEO of Metinvest Holding. “We expect to get strong synergies, firstly, by optimizing the modernization programs at our steel assets, raising the production efficiency, and improving our market position...The merger will help to reinforce the position of the national mining and metals industry in the global markets, which is a keystone to the growth of Ukraine's economy and higher economic security.”
Metinvest is an international vertically integrated mining and metals group of companies. Production facilities allow the companies to satisfy their own needs in raw materials, liquid steel, and semi-finished products, and to be a key supplier for other Ukrainian, European, and Asian businesses. The shareholders of Metinvest Group are SCM Group (75%) and Smart Group (25%). Metinvest Holding is its managing company.