29 Mar 2006 07:01
OJSC Novolipetsk Steel29 March 2006 OJSC Novolipetsk Steel29 March 2006 NOVOLIPETSK STEEL AGREES TO ACQUIRE 82% INTEREST IN COKE PRODUCER JSC"ALTAI-KOKS" AND 100% INTEREST IN GROUP OF COAL COMPANIES "PROKOPIEVSKUGOL" OJSC Novolipetsk Steel NLMK (LSE: NLMK) is pleased to announce that it hasagreed to acquire from a group of investors an 82% interest in "Altai-koks",coke-chemical plant, and a 100% interest in holding company Kuzbass AssetHoldings Limited, Gibraltar, which owns 100% of interest in "Prokopievskugol"Coal Company for about USD 750 million. The acquisition is to be financed infull from NLMK's existing cash funds. JSC "Altai-koks" is the leader among coke-chemical plants in Russia. It produceshigh-quality coke and chemical products. JSC "Altai-koks" production of cokeamounts to 3.8 million tonnes. By the end of 2006 a new coking plant withcapacity of 1.14 million tonnes will be put in operation. As a result, totalcapacity of JSC "Altai-koks" will amount to almost 5 million tonnes per year.For the moment, NLMK has agreed to buy an additional 6.12% interest in JSC"Altai-koks" from different minority shareholders. In total, the gross share ofJSC "Altai-koks" on NLMK's balance sheet will amount to over 88%. "Prokopievskugol" Group is the leader in high-grade coking coal production andprocessing in the Kemerovo region. It produces more than 5 million tonnes ofcoal per year and has about 350 million tonnes of coal reserves including 220million tonnes of high-grade coking coal reserves. "Prokopievskugol" Group ownsseven mines and three processing plants. The total production volume of cokingcoal concentrate is over 3 million tpy, which is about 50% of NLMK'srequirements. Together with Zhernovskoe-1 coal deposit (expected to reach theplanned production capacity in 2009) that will enable NLMK to achieve totalself-sufficiency in coking coal. Dr. Vladimir Lisin, NLMK's Chairman, commented "This acquisition is an important step in the implementation of NLMK's verticalintegration strategy. It enables us to secure additional competitive advantagethrough the stable supply of key raw materials at lower cost. We believe thatthese new assets will enable NLMK to become fully self-sufficient in coke andoptimize production process within the company, as well as to become animportant player in the Russian coke products market". For further information: NLMKAnton Bazulev +7 495 915 1575Financial DynamicsJon Simmons +44 207 831 3113 This information is provided by RNS The company news service from the London Stock Exchange