September 07, 2008

NLMK to acquire international steel trading companies

Novolipetsk Steel has announces that its 100% owned subsidiary, NLMK International BV has signed an agreement to acquire a 100% stake in Novexco Limited and 100% of Novex Trading SA, both trading companies, from the United Steel Group. The acquisition price is approximately EUR 77 million. The deal is subject to regulatory approval.

In 2007, Novex Trading SA and Novexco Limited acquired the trading business of Steelco Mediterranean Trading Ltd Tuscany Intertrade and Moorfield Commodities Company, the international wholesale traders that were exclusive export traders of NLMK’s products for several years.

Steelco Mediterranean Trading Ltd is a trading company specializing in slabs supply to the countries of North America and South East Asia.

Tuscany Intertrade (UK) is a trading company supplying hot and cold rolled steel to EU countries.

Moorfield Commodities Company is a trading company supplying electrical steel, hot and cold-rolled steel primarily to European countries.

NLMK release said tat “This transaction is in line with the Company’s strategy to establish an international trading department within the Group and is designed to better control the Company’s export sales and further enhance its presence in core export markets.

Mr Dmitry Baranov VP for sales of NLMK said that “This acquisition will enable us to better control our export sales to core markets, consolidate and control trading revenues as well as better service our customers and enhance the transparency of our export operations. We have long lasting relationships with the companies acquired, and we are sure that these companies will perfectly integrate into NLMK’s business model.”