New owners each have 20 percent stake and plan new synergies (Credit Photo @ Prague Post)
Ostrava, April 4 (ČTK and other sources) — Russian group Evraz has sold its Czech division Evraz Vitkovice Steel (EVS) to a group of private investors, EVS’s spokesman Jaromír Krišica told ČTK today without disclosing the price of the transaction. Server Patria.cz has said the price of EVS was $89 million. In addition, the new owners also acquired EVS’s obligations totaling $198 million. The new owners want to continue to develop EVS as an independent player on the market for rolled products, Krišica said. The new owners are Martinley Holdings, Nabara Holdings, Vitect Services, Hayston Investments and Dawnaly Investments, each buying 20 percent of EVS, according to Patria.cz. “Investors intend to improve the economy of EVS through the synergies arising out of an opportunity to purchase raw materials from various independent suppliers,” Krišica said.
In the near future, investors do not plan to make significant changes in the operations and management of EVS, he added.
EVS’s trade union welcomes the change of owner, union chairman Zdeněk Kološ said.
“The company was not managed well. It lacked orders and, most importantly, was reducing staff numbers,” Kološ said.
The union hopes that the situation in EVS will improve after the takeover by new owners. “We believe they will want to improve performance and maintain employment,” he said.
EVS’s trade union members have been on a strike alert for about a year, but they are not going to end the alert now.
“We declared the strike alert because the steelmaker was in danger of being closed. If the new owner contacts us, starts a discussion with us and gives us some guarantees, we will, of course, end the alert. But if it presents an even worse program, the development might be different,” Kološ added
Evraz Vitkovice Steel is the third-biggest steel company in the Czech Republic with an annual output of about 950,000 metric tons of steel. In 2013, however, EVS produced 571,000 metric tons of steel products. It employs about 1,100 people.
Evraz, which is Russia’s biggest steel group, bought EVS in 2005 for $285 million.
In a press release from Evraz, the company said that it is expected that the transaction will not affect EVS production or the composition and number of its work force.
“We continue to focus on streamlining our business, concentrating management’s efforts on the key assets and deleveraging. The disposal of Vitkovice Steel is part of that strategic initiative.” said Alexander Frolov, EVRAZ’s CEO, said in the press release.
According to EVS standalone financial statements prepared in accordance with IFRS, in 2013 EVS generated $442 million of revenue from continuing operations. As of 31 Dec. 31 2013, Evraz Vitkovice Steel had gross assets of $278 million. For the year ended Dec. 31, 2013, it produced a gross profit of $31 million, (2) million of EBITDA and a loss before tax from continuing operations of $32 million. This loss includes, inter alia, foreign exchange loss of $8.5 million, interest expense of $6.6 million and other expenses related to stoppages of operations of US$9.7 million, Evraz stated.
EVRAZ will apply the sales proceeds for general corporate purposes, including, but not limited to, the repayment of some of its debt.
Source :
http://www.praguepost.com/economy/38165-evraz-sells-vitkovice-steel-to-investor-group