Mechel Announces Closure of Deal to Dispose of Toplofikatsia Rousse EAD
07/12/2013 - Mechel OAO, a Russian mining and metals company, announced the closure of a deal disposing of 100% of the shares of Toplofikatsia Rousse EAD (TPP Rousse, Bulgaria).
According to the sale and purchase agreement, signed in December 2012, 100% of Toplofikatsia Rousse EAD's shares were sold to Toplofikatsia Pleven, a privately-held Bulgarian power company. The disposal is valued at approximately € 29 million based on the asset's equity value. The agreement also stipulates that Toplofikatsia Rousse EAD's debt to Mechel Carbon for historical coal deliveries in amount of US$ 18.8 million will be repaid.
VTB Capital and UniCredit Bank acted as financial advisors and CMS as legal advisor to Mechel OAO in this transaction.
In 2012 TPP Rousse generated 364 GWh of electricity and 235 Gcal of heat power, which resulted in 56.8 million lev in revenues and -3.1 million lev in EBITDA. As of 31 December 2012 TPP Rousse had some 300 employees.
Commenting on the event, Stanislav Ploschenko, Mechel OAO's chief financial officer, noted, "The disposal of TPP Rousse is the second deal for disposal of the Group's non-core assets that has been completed this year. Apart from financial gain from this asset's disposal, this deal will enable our management to focus on its business priorities — consolidating the group's leading position as a metallurgical coal producer, strengthening its positions in steel products for construction and increasing its share on the markets for high value-added steel products. The transaction was made in line with the program for restructuring the group's assets as earlier approved by Mechel OAO's Board of Directors. The funds from this sale will be used to repay the Group's debts."
Mechel is a leading Russian company. Its business includes four segments: mining, steel, ferroalloy and power. Mechel unites producers of coal, iron ore concentrate, nickel, ferrochrome, ferrosilicon, steel, rolled products, hardware, heat and electric power. Mechel products are marketed domestically and internationally.
