NLMK.L Regulatory News (NLMK)

3 May 2007 10:36

OJSC Novolipetsk Steel03 May 2007 NLMK-Duferco JV to Acquire Winner Steel NLMK-Duferco JV has reached a definitive agreement with Winner Steel INC. andits controlling shareholder to acquire substantially all the assets of WinnerSteel INC. and certain of its liabilities. The acquisition will be effected through Duferco U.S. Investment Corporation, awholly-owned subsidiary of Steel Invest & Finance S.A. (Luxembourg), a 50/50joint venture between the Duferco Group and NLMK. The acquired assets andliabilities will be held by Duferco U.S. Investment Corporation through a newlycreated entity, Winner Steel LLC. The total acquisition price, including the assumed liabilities, is estimated tobe approximately US$211.6 million, subject to a working capital adjustment basedon the closing balance sheet. NLMK-Duferco JV is now discussing with Esmark the possibility of granting Esmarkor its affiliates a 6-months option to acquire up to 50% Winner Steel LLC atNLMK-Duferco JV cost plus agreed interest. Winner Steel is one of the largest independent galvanized steel producers in theUnited States. Its operations are located on a single site in Pennsylvania andinclude three galvanizing lines with combined annual capacity of around 1.2million tonnes and production in 2006 of around 0.6 million tonnes. WinnerSteel's revenues in 2006 were around US$427 million. The acquisition of Winner Steel will result in further downstream expansion forthe NLMK-Duferco JV Farrell facility, which, being located next to Winner Steel,has historically been one of its major suppliers of cold-rolled substrate. Thetransaction is expected to result in substantial synergies for the Farrellfacility and is viewed by NLMK-Duferco JV as a good alternative to theconstruction of a galvanizing line at the Farrell site. The closing of the transaction is expected in June, 2007. About Novolipetsk Steel (NLMK)Novolipetsk Steel (NLMK) is one of the world's leading steel companies and oneof the three largest flat steel producers in Russia, producing over 9 milliontonnes of crude steel annually. NLMK's production facilities are among the mosttechnologically advanced in Russia, producing flat steel products in a varietyof grades and sizes. NLMK is one of the world's most profitable steel companieswith EBITDA margin over 40%.The traditional strengths of the Company are: vertical integration into rawmaterials, world class assets with a competitive cost of production, proximityto mature and developing markets where the company has strong positions, soundfinancial performance, professional and experienced management team. For further information visit www.nlmksteel.com About Duferco GroupDuferco Group is an international steel production, processing and trading groupwith headquarters in Lugano, Switzerland. Duferco had revenues in excess of USD7 billion in 2005, and is one of the world's largest companies engaged in theworldwide production, distribution and trade of all types of steel products,including raw materials used in steel making processes. Duferco has trading andproduction activities in more then 40 countries. It operates steel making andprocessing plants in Western and Eastern Europe, USA, South Africa and CentralAmerica. For further information visit www.duferco.com About Steel Invest & Finance S.ANLMK and Duferco Group formed a joint venture through Steel Invest & FinanceS.A. (Luxembourg), a limited liability company (societe anonyme) establishedunder the laws of Luxembourg in which they each hold a 50% interest. The jointventure holds 100% or majority interests in 23 companies including one steelmaking plant and five steel rolling facilities with total finished steel outputof 4.5 million tonnes in 2006 as well as a network of steel service centers. About Esmark Inc.Headquartered in Chicago, USA and founded by the Bouchard Group, Esmark is asteel services family of companies. For further information visit www.esmark.com This information is provided by RNS The company news service from the London Stock Exchange