Evraz Group S.A. announced the purchase of a 29.2% stake in Highveld Steel and Vanadium Corporation (“Highveld”) from Anglo American plc (“Anglo American”) for US$238 million, thus exercising an option to increase its stake in Highveld pursuant to an earlier agreement.
In an agreement announced on July 14, 2006, Evraz purchased a 24.9% stake in Highveld from Anglo American. Evraz had an option to increase its stake in Highveld once regulatory approvals are received, including those from competition authorities in the European Union and South Africa. Under the conditions of the clearances granted to Evraz in February and April 2007 by the European Commission and competition authorities in South Africa, Evraz has committed to divest certain Highveld’s vanadium production facilities and related assets, including the Vanchem operations located in Witbank, Republic of South Africa. Also, Evraz will grant access to Highveld’s Mapochs Mine, divest its 50% joint venture holdings in South Africa Japan Vanadium (Proprietary) Ltd. and maintain existing vanadium feedstock supply agreements with certain customers.
As of May 4, 2007, Evraz owns approximately 54.1% of all outstanding shares in Highveld. Under South African law, Evraz is required to make a mandatory general offer to all shareholders of Highveld after its ownership position has exceeded 35%. The offer will be made within the next 30 calendar days.
Commenting on the deal, Alexander Frolov, Evraz’s Chairman and CEO, said: “Through Highveld, Evraz is gaining valuable access to the growing South African steel and construction sectors which are expanding, driven by strong demand growth and supported by new mining, infrastructure and industrial projects. With the acquisition of Highveld Steel and Vanadium Corporation Evraz also becomes the leading player in vanadium globally. We would like to reiterate our commitment to advancing black economic empowerment at Highveld.”
Posted May 7th, 2007
