MMK Increases Stake in Belon Coal Company to 82.6%
10/20/2009 - At the final transaction stage, OJSC Magnitogorsk Iron and Steel Works (MMK) increases its stake in Onarbay Enterprises Ltd, which owns 82.6% of OJSC Belon, from 50 to 100%.
OJSC Magnitogorsk Iron and Steel Works (MMK) has closed the transaction to get effective control over 82.6% of OJSC Belon, one of the leading coal concentrate producers in Russia. At the final transaction stage, MMK increased its stake in Onarbay Enterprises Ltd, which owns 82.6% of Belon, from 50 to 100%.
According to MMK, the transaction secures stable coking coal supplies for its steel smelting operations, including supplies of deficit coal grades. Supplies from Belon will account for the bulk of the company’s required coking coal concentrate.
“This transaction brings MMK self-efficiency in strategically important input material to a new level,” said Victor Rashnikov, Chairman of the MMK Board of Directors. “We are sure that this acquisition will strengthen our competitiveness in the current situation and in the long-term prospect.”
The remaining 17.4% of Belon shares are in “free float” on Russian stock exchanges.
OJSC Magnitogorsk Iron and Steel Works is a leader of the Russian steel industry and among the world's largest steel producers. The company encompasses the entire production chain, from preparation of iron ore to downstream processing of rolled steel. MMK turns out a broad range of steel products with a predominant share of high-value-added goods. In 2008, it produced 12 million tonnes of crude steel and 11 million tonnes of commercial products. MMK Group sales stood at USD 10.550 billion.
OJSC Belon is a rapidly developing coal and coal concentrate producer and one of the leading Russian steel traders. In 2008, the company produced 5.5 million tonnes of coal, including 2.9 million tonnes of coking coal. Belon sales in 2008 according to RAS stood at USD 1.125 billion, net profit at USD 124 million.
