Mandatory Tender Offer in Respect of Minority Stake in OJSC Timir
29 April 2013 - Following the announcement dated 2 April 2013 of its acquisition of a 51% stake in OJSC Timir ("Timir"), EVRAZ plc (LSE: EVR) announces that in accordance with Russian regulatory requirements it has submitted today to Russia's Federal Service on Financial Markets (FSFM) and to Timir a mandatory tender offer to Timir's shareholders to acquire those shares in Timir that it does not currently own (the "Tender Offer"). Under the Tender Offer, EVRAZ has made an offer of RUB1,021.9243 (approximately US$32.7) for each share in Timir.
The Tender Offer is a Russian law requirement and it is EVRAZ's expectation that the Tender Offer will not be accepted by Timir's shareholders.
The Tender Offer will remain open until 8 July 2013, and EVRAZ will update the market as to acceptances within 30 days after that as stipulated by the law.
Notes to editors
Timir is a joint venture between EVRAZ and Alrosa created for the development of iron ore deposits and is currently holding licences for 4 iron ore deposits (Tayozhnoye, Desovskoye, Tarynnakhskoye and Gorkitskoye) in the southern part of Yakutia in Russia with total mineral resource base under the Russian geological classification of 3.5 billion tonnes (Russian geological categories of A+B+C1). EVRAZ acquired a 51% stake in Timir for RUB4,950 million (approximately US$160 million) to be paid in several instalments. If all the shares subject to the Tender Offer are tendered, EVRAZ could be liable to pay a further US$152 million in cash consideration. As at 31 December 2013, Timir had gross assets of approximately RUB10,662 million and loss before tax of approximately RUB46 million.
The first phase of the Timir project involves development of the Tayozhnoye deposit with total mineral resources under the Russian geological classification of 341 million tonnes of iron ore (Russian geological categories of A+B+C1) and grades of 38-40% Fe. The Tayozhnoye deposit is located 150 km north of Neryungri city, an important industrial centre in the southern part of Yakutia, and close to the existing infrastructure - a railroad, power grid and a paved road. The mining capacity of the Tayozhnoye open pit is estimated at 15 million tonnes of iron ore per annum. Convenient geographical location of the Tayozhnoye deposit on a railway connected to the TransSiberian railroad provides for competitive delivery of iron ore products to EVRAZ ZSMK and Southeast Asian countries through the Far East of Russia.
Total investments in the first phase of the Timir project are estimated to amount to approximately US$1.8 billion during the period from 2013 to 2018. EVRAZ and Alrosa are expected to finance the Timir project on a pro rata basis. Upon completion of the feasibility study of the first phase, Timir may apply for funding on a project finance basis.
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For further information:
Media Relations:
Oleg Kuzmin
VP, Corporate Communications
London: +44 207 832 8998 Moscow: +7 495 937 6871
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Investor Relations:
Sergey Belyakov
Director, Investor Relations
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[email protected]
EVRAZ is a vertically integrated steel, mining and vanadium business with operations in the Russian Federation, Ukraine, USA, Canada, Czech Republic, Italy and South Africa. EVRAZ is among the top steel producers in the world based on crude steel production of 15.9 million tonnes in 2012. In 2012 EVRAZ sold 15.3 million tonnes of steel products. A significant portion of the company's internal consumption of iron ore and coking coal is covered by its mining operations. The company's consolidated revenues for the year ended 31 December 2012 were US$14,726 million, and consolidated EBITDA amounted to US$2,012 million.
