OREANDA-NEWS.  EVRAZ plc (LSE: EVR) (“EVRAZ” or the “Company”) announces the signing and closing of the sale of its wholly-owned subsidiary EVRAZ Vitkovice Steel (“EVS”) to a group of private investors (Martinley Holdings Limited, Nabara Holdings Limited, Vitect Services Limited, Hayston Investments Limited and Dawnaly Investments Limited, with each buying 20% of EVS), for a gross consideration of USD 89 million adjustable for the actual level of EVS working capital. In addition the buyers have assumed USD 198 million of EVS debt liabilities, including the repayment of USD 128 million of EVRAZ’s inter-company debt.

EVRAZ will apply the sales proceeds for general corporate purposes, including, but not limited to, the repayment of some of its debt.

EVS, which has been a part of the Company since November 2005, is a manufacturer of steel hot rolled products located in Ostrava in the Czech Republic. In 2013, EVS produced 571 thousand tonnes of steel products.

According to EVS standalone financial statements prepared in accordance with IFRS, in 2013 EVS generated USD 442 million of revenue from continuing operations. As of 31 December 2013, EVRAZ Vitkovice Steel had gross assets of USD 278 million. For the year ended 31 December 2013, it produced a gross profit of USD 31 million, USD (2) million of EBITDA and a loss before tax from continuing operations of USD 32 million. This loss includes, inter alia, foreign exchange loss of USD 8.5 million, interest expense of USD 6.6 million and other expenses related to stoppages of operations of USD 9.7 million.

The plant employs just over 1,000 people.

It is expected that the transaction will not affect EVS production or the composition and number of its work force.

Alexander Frolov, EVRAZ’s CEO, said,

“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.”