October 14, 2008

Mechel paid USD 186.5 million for Bratsk Ferroalloy Plant - Report

Interfax citing informed sources reported that Mechel paid USD 186.5 million for the Bratsk Ferroalloy Plant.

Mechel in a recent press release announced that it bought 100% of the plant, which had been owned by the ICT group prior to the transaction. Mechel did not say how much it paid for the plant.

Bratsk Ferroalloy Plant is the largest enterprise in Eastern Siberia producing high grade ferrosilicon. The plant was founded on the basis of the crystalline silicon workshop of Bratsk Aluminium Smelter in 2003 and has advantageous geographical position and operates within stable markets. The plant’s ferrosilicon output totals 84,000 tonnes annually and comprises a 13% market share of Russia’s total output. The plant’s share in the Russian ferrosilicon domestic supplies market amounted to 16% in 2006 and increased to 20% in the first quarter of 2007. The plant’s revenues for 2006 on a Russian Accounting Standards basis amounted to RUB 1.3 billion (USD 51.0 million) and net profit was approximately RUB 151.0 million (USD 6 million). The plant’s net assets on a Russian Accounting Standards basis amounted to about RUB 4.2 billion (USD 165 million) as of the end of 2006.

The ICT Group was established back in 1991. Following the sale in 2005 of top Russian silver miner Polymetal, shipbuilder Baltiisky Zavod and the Interterminal logistics company, the group's largest assets are the Titran transportation engineering plant in Tikhvin, Tikhvin ferroalloy Plant, Nomos Bank, the Bratsk Ferroalloys Plant and NISK, a real estate management firm.