August 30, 2008

Terms for Yuku merger to be known by end 2007

Interfax citing Mr Alexander Frolov president of the Evraz Group while speaking at the conference organized by UBS in Moscow said that the terms for merging the Raspadskaya and Yuzhkuzbassugol coal companies, controlled by the Evraz Group, will be decided by the end of the year.

He said a valuation on the current situation has been completed and a development strategy for Yuzhkuzbassugol determined. Mr Frolov said earlier "By merging the two companies we will create a coking coal production leader in Russia and become one of the top three coking coal sector companies in the world."

It was reported earlier that the merger should be completed before the end of 2007 but Evraz Group told Interfax that it is still too early to talk about postponing the completion of the merger. A group spokesman said "If a decision is made to close the deal in the first quarter of 2008 that will be announced in advance."

Evraz announced the merger plans in June. It was proposed at the time that the terms and structure of the deal would be agreed in the second half of 2007.

After the merger, Raspadskaya will own all Yuzkuzbassugol shares and Evraz will continue to own Raspadskaya shares through its participation in Corber Enterprises Limited. The merger will give Evraz control over Corber and Raspadskaya.