Moscow - Evraz, Russia’s largest steel producer, sold a stake in its South African unit to a local partner and said it plans to continue developing the business.
Evraz will retain a controlling stake in Evraz Highveld Steel & Vanadium Ltd. after selling 34 percent to Macrovest 147 Proprietary Ltd. for 289 million rand, the Russian company said in a statement today.
Macrovest, led by Barend Petersen, executive chairman of De Beers Consolidated Mines, will also refinance 50 percent of a debt facility Evraz provided to the unit.
Evraz Highveld slumped 22 percent in Johannesburg trading to 5.35 rand by 12:49 pm, the biggest intraday drop since April 29.
Evraz, partially controlled by billionaire Roman Abramovich, bought 25 percent of Highveld from Anglo American in 2006 and increased its stake to 79 percent the following year after buying out Anglo’s remaining shares and stock from Credit Suisse.
The total value of those deals was $678 million.
In March 2013, it agreed with Nemascore (Pty) Ltd, a black economic empowerment group, to sell a majority stake in the unit for about $320 million.
Nemascore failed to find the proceeds to fund the deal and in February this year Evraz said it is engaged in talks with other potential bidders.
“We have analysed various options for the further development of Highveld and decided to introduce a strong local partner, who we believe will add significant value and expertise in developing our South African asset in a challenging market,” Evraz chief executive Alexander Frolov said in the statement today. - Bloomberg News