| Other Photos |
 |
|
 |
Severstal Buys U.S. Coal Corp.
Severstal will purchase the American company PBS Coals Corp. in October for $1.3 billion, it announced on Friday. It will provide for almost half the coal demand of Severstal’s North American enterprises. PBS Coals will be acquired publicly by Penfold Capital Acquisition Corp. in September, which will then be listed on the Toronto Stock Exchange (TSX), where Severstal will buy it for C$8.30 per share (US$7.95). Severstal will use its own funds for the deal. PBS Coals has $40-50 million in debt.
PBS Coals specializes in coking and energy coal. It has six underground mines and six open mines in Pennsylvania. It has a coking coal capacity of 4 million tons and reserves of 133.5 million tons. The production cost of a ton of coal concentrate is $50-60.
The international division of Severstal consists of its European facilities (the Italian Lucchini Group) and its North American holdings (Severstal North America, SeverCorr, Sparrows Point, WCI Steel and Esmark). Severstal International’s capacity in the United States is about 10 million tons of steel per year, requiring 5 million tons of coal.
Analysts say the company’s deal for PBS Coals was well advised. The price was reasonable, it will have a synergistic effect with the other Severstal enterprises and it will give the company the opportunity to sell some of its product on the U.S. market. Severstal is expected to continue its expansion in the United States. It may also expand to Brazil, observers speculate.
www.kommersant.com
All the Article in Russian as of Aug. 25, 2008
|
|
|
