NLMK.L Regulatory News (NLMK)

12 Feb 2007 07:02

OJSC Novolipetsk Steel12 February 2007 NLMK-DUFERCO JV MAKES A JOINT BID with Esmark to acquire Winner Steel, USA Novolipetsk Steel (NLMK) and Duferco Group are pleased to announce that DufercoU.S. Investment Corporation and Esmark have formed a consortium to purchase theassets of Winner Steel, based in Pennsylvania, USA. The consortium has enteredinto a letter of intent with Winner Steel. The transaction remains subject tofurther negotiation and execution of a definitive asset purchase agreement andother conditions. It is currently expected to be completed in the second quarterof 2007. Duferco U.S. Investment Corporation is a wholly-owned subsidiary of Steel Invest& Finance S.A. (Luxembourg), a 50/50 joint venture between the Duferco Group andNovolipetsk Steel. 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. The main applications of the galvanized steel produced by the company are in theconstruction, appliances and automotive industries. Winner Steel is locatedclose to the Farrell facility, which is already part of the NLMK-Duferco JV, andis one of the primary suppliers of cold-rolled steel to the galvanizingindustry, including Winner Steel. Alexey Lapshin, NLMK President and a board member of Steel Invest and FinanceS.A, said: "We welcome this development in the business of our joint venture with theDuferco Group. It will provide for an increase in value-added products andfurther expansion into the large North American market. We are delighted to haveEsmark, one of the most dynamic companies in the US steel industry, as ourpartner in this project." Benedict Sciortino, Director of the Duferco Group and a board member of SteelInvest and Finance S.A, said: "Being located just next to our Farrell facility in Sharon, Winner Steel is alogical component of our North American growth strategy. The acquisition islikely to create substantial synergies by ensuring a stable supply ofcold-rolled material to Winner Steel and by increasing the downstream exposureof the NLMK-Duferco JV. We are delighted to work together with Esmark on thistransaction and are hopeful that it may lead to successful joint projects in thefuture." About Novolipetsk SteelNovolipetsk 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.A NLMK 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 both 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. The mission of Esmark is to establish thebenchmark standards for strategic consolidation, operating efficiency andmanagement excellence in the steel sector. For further information visit www.esmark.com About Winner Steel 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 3 galvanizing lines with combined annual capacity of around 1.2 milliontonnes and production in 2006 of around 0.8 million tonnes. For further information visit www.winnersteel.com This information is provided by RNS The company news service from the London Stock Exchange