NLMK agrees to sell stake in Tuapse Seaport

Novolipetsk steel has announced that it has agreed to sell its 69.41 % share in OJSC Tuapse Seaport (TMTP) to Universal Cargo Logistics Holding B.V. (UCLH). The transaction is subject to antitrust regulatory approval and is expected to close in two months. 

This divestiture is in line with NLMK’s previously announced internal restructuring programme aimed at streamlining asset structure. TMTP was classified as a non-core asset by NLMK’s Board of Directors on 27 February 2006.  

The transaction will value NLMK’s stake at RUR 7,105,155,057 (about $254 mln ), or RUR 1.17 per TMTP ordinary share. In accordance with the Russian Federal Law “On joint stock companies”, NLMK has employed Ernst & Young and Dresdner Kleinwort to conduct an independent market valuation of TMTP shares.  The NLMK Board has obtained a fairness opinion from Dresdner Kleinwort.

The agreement with NLMK envisages that Universal Cargo Logistics Holding B.V. will offer all NLMK shareholders the opportunity to maintain their interest in Tuapse Seaport through UCLH. This proposal will enable NLMK shareholders to acquire TMPT shares at RUR 1.17 per share on a pro rata basis in accordance with their NLMK shareholding as of the date when Universal Cargo Logistics Holding B.V. acquires NLMK’s stake in TMTP. Also, in accordance with the Russian Federal Law “On joint stock companies”, Universal Cargo Logistics Holding B.V. will offer to buy shares from TMPT minority shareholders at RUR 1.17 per share.

NLMK and TMTP have signed a long-term agreement for metals freight, which is guaranteed by Universal Cargo Logistics Holding B.V.
Cash generated from the disposal of NLMK’s TMTP stake will be used to repay short-term debt and help fund the company’s current investment projects.