Mechel Service Global BV has purchased a 100% stake in Turkish steel trading group Ramateks for a purchase price of $3 million and the assumption of up to $13.8 million in debt*, the majority of which (77%) is trade financing.
Ramateks Group’s main activity is distribution of construction and stainless steel long products as well as other types of steel products. The company operates equipment for steel product cutting as well as a mix of its own and rented storage capacities in Istanbul and Konya that amounts to the equivalent of 21 thousand tonnes of steel products. After becoming a part of Mechel group, Ramateks is expected to increase its sales volumes 2.5 times by 2014.
Mechel OAO said the acquisition supports its ongoing strategy to expand its Mechel Service subsidiary, which manages the group's steel products retail sales and service network.
“We expand Mechel Service operations in Balkan region as we consider this market as very promising with serious growth potential,” commented Andrey Ponomarev, Managing Director of Mechel Service Global BV. “Eastern Europe today is one of our priorities for development. In Romania alone, there are 9 successfully operating branches of our Mechel Service Romania subsidiary. In 2009, we expanded our sales and service network to Serbia and Bulgaria. These subsidiaries primarily sell products of Mechel's Romanian plants.
"In the 1st quarter of 2010, sales of Mechel Service's Eastern European branches were 3 times higher than in the same period a year ago,” added Ponomarev. “This was a result of both geographic expansion of our network and increase in the efficiency of existing subdivisions.
* According to the last auditors' report as of June 18, 2010. Data on Ramateks' debt is converted to US dollars according to the European Central Bank cross- rate TL-EUR-USD as of the same date.
Mechel, one of Russia’s leading companies, comprises four segments: mining, steel, ferroalloy and power. Mechel unites producers of coal, iron ore concentrate, nickel, steel, ferrochrome, ferrosilicon, rolled products, hardware, heat and electric power, and its products are marketed domestically and internationally.
Ramateks Group distributes construction and stainless steel long products as well as other types of steel products. The company operates equipment for steel product cutting as well as a mix of its own and rented storage capacities in Istanbul and Konya. In 2009, Ramateks' revenue was about $ 33 million.