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Severstal to sell US steel assets for $2.3 billion

July 21, 2014, 13:52 UTC+3 MOSCOW
Severstal acquired Dearborn in 2004 for $285.5 million and invested about $1 billion since then. Severstal Columbus established in 2005 was launched in 2007 and financed with about $1.5 billion
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© ITAR-TASS/EPA/JEFF KOWALSKY

MOSCOW, July 21. /ITAR-TASS/. Alexei Mordashov’s Severstal steel and mining company has agreed to sell steel assets in the US, Severstal Columbus and Severstal Deaborn, for $2.325 billion, the company reported. The deal is to be closed this year.

The board of directors has approved selling the assets to the US companies Steel Dynamics and AK Steel Corporation respectively.

Severstal acquired Dearborn in 2004 for $285.5 million and invested about $1 billion since then. Severstal Columbus established in 2005 was launched in 2007 and financed with about $1.5 billion. The company’s total investments in both US plants are estimated at $2.8 billion. Sales process started late in 2013 and has been completed, goes the release.

Evercore and Citigroup are financial consultants on the deal; Skadden, Arps, Slate, and Meagher & Flom LLP act as legal advisors.

Last week, Severstal reported selling the coking coal facility in Pennsylvania, PBS Coals, to the Canadian Corsa Coal. The $140 million deal is expected to be finalized by the middle of August 2014 once several pre-conditions are implemented. Severstal acquired PBS Coals in 2008 for $876 million.

Severstal Northern American segment, including the coal assets in the US, generated a revenue of about $1 billion from the total $3.3 billion in the first quarter of 2014.

The company sold three steel plants in 2011 as demand and prices for metallurgical products fell.

Severstal is one of the world’s major vertically integrated steel and mining companies with assets in Russia and the US as well as Ukraine, Latvia, Poland, Italy, Liberia and Brazil. Alexei Mordashov controls a 79.2% stake.

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