Mechel Announces Acquisition of Turkish Steel Trading Company
OREANDA-NEWS. July 09, 2010. Mechel OAO (NYSE: MTL), one of the leading Russian mining and metals companies, announces purchase of 100% stake in Turkish steel trading group Ramateks by Mechel Service Global B.V., Mechel OAO’s subsidiary managing the group’s steel products retail sales and service network, reported the press-centre of Mechel.
Mechel continues implementation of its strategy to expand its own steel service and sales network named Mechel Service. On July 6, 2010 Mechel Service Global B.V. completed the transaction to acquire 100% of the shares of Turkish steel trading group Ramateks. The purchase price amounted to USD3 mln. Ramateks debt incurred by Mechel, the majority of which (77%) is trade financing, didn’t exceed USD13.8 mln.*.
The main activity of Ramateks Group is distribution of construction and stainless steel long products as well as other types of steel products. Ramateks storage capacities are located in Istanbul and Konya. The company also has equipment for steel product cutting.
Ramateks client base is well-diversified and includes both domestic and foreign customers. With 10 thousand square meters of own warehousing capacities and about 4.5 thousand square meters of leased area Ramateks’ total storage capacity amounts to 21 thousand tonnes of steel products. Ramateks is expected to increase its sales volumes 2.5 times by 2014 after becoming a part of Mechel group.
In 2009 Ramateks’ revenue was about USD33 mln.
Andrey Ponomarev, Managing director of Mechel Service Global B.V., commented on the event:
“We expand Mechel Service operations in Balkan region as we consider this market as very promising with serious growth potential. Eastern Europe today is one of our priorities for development. In Romania alone there are 9 successfully operating branches of our Mechel Service Romania subsidiary. In 2009 we expanded our sales and service network to Serbia and Bulgaria. These subsidiaries primarily sell products of Mechel’s Romanian plants.
In the 1st quarter of 2010 sales of Mechel Service’s Eastern European branches were 3 times higher than in the same period a year ago. This was a result of both geographic expansion of our network and increase in the efficiency of existing subdivisions.
We continue our active development in Eastern Europe to establish efficient and well-diversified sales infrastructure, to educate personnel and enlarge clientele by the time of final recovery of the economy. This will allow Mechel Service to become a significant player in steel sales and services in Eastern Europe.”
* According to the last auditors’ report as of June, 18 2010. Data on Ramateks’ debt is converted to US dollars according to the European Central Bank cross- rate TL-EUR-USD as of the same date.