Acquisition

4 Oct 2007 10:11

OJSC Magnitogorsk Iron &Steel Works04 October 2007 Magnitogorsk Iron & Steel Works acquires 10.75% stake in OAO Belon Magnitogorsk Iron & Steel Works Open Joint Stock Company (MMK) announces theacquisition of 10.75% shares in OAO Belon, a Russian producer of coal and coalconcentrates. The decision of MMK to enter the capital of OAO Belon was taken by MMK Board ofDirectors on September 13. The stock was acquired from Sapwood InvestmentsLimited. Going forward OAO MMK will consider a further increase of its stake inOAO Belon. The decision to acquire a stake in OAO Belon, which has a strong growthpotential, is in line with the strategic plans of MMK to create of its own rawmaterials base and allows OAO MMK to further secure the long-term supplies ofcoal of the required grades. The Magnitogorsk Iron & Steel Works OJSC (MMK) ranks 20th among the world'slargest steel producers (Source: IISI) and is one of the leaders of Russia'ssteel industry (Source: Chermet). The company is a large steel producing complexencompassing the entire production chain, from preparation of iron ore todownstream processing of rolled steel. MMK turns out a broad range of steelproducts with a predominant share of value added goods. In 2006 the Companyproduced 12.5 m tonnes of crude steel and 11.3 m tonnes of commercial products.In 2006 sales under US GAAP amounted to USD 6.4 bn, with net profit standing atUSD 1.4 bn. Belon Group is a dynamic producer of coal and coal concentrate and one of theleading steel traders in Russia. OAO Belon is the managing company of the Group,which comprises of several mining, processing and service companies. The Groupincludes Chertinskaya-Koksovaya, Novaya-2, Listvyazhnaya and Kostromovskaya(under construction) coal mines, Novobachatskiy-1 and Novobachatskiy-2 open-castmines (under construction), Belovskaya and Listvyazhnaya concentration plants.In 2006 coking coal production amounted to 1,724 million tons, coal concentrateproduction - to 4,389 million tons. The total volume of coking and thermal coalsproduced came to 3,381 million tons. According to Belon Group IAS accounts theGroup's revenue for 2006 amounted to RUB 10 billion 430 million, net income for2006 was RUB 1 billion 222 million. Contacts: Press secretary:Elena AzovtsevaPhone: +7 3519 24 90 82E-mail: azovtseva@mmk.ru Head of Investor Relations : Evgeny KovtunovPhone: +7 3519 24 93 55E-mail: kovtunov@mmk.ru This information is provided by RNS The company news service from the London Stock Exchange