MOSCOW, March 2. /TASS/. Severstal has suspended delivering products to countries in the European Union after the EU slapped sanctions on its main shareholder Alexey Mordashov, the company said in a statement on Wednesday. The EU imposed these restrictions amid Russia’s military operation in Ukraine.

"We decided to officially confirm that supplies to the EU were suspended due to the sanctions imposed on [our] shareholder. The flow of goods will be redirected to alternative global markets," the statement said.

"Given the fact that Severstal has the lowest production costs globally, we are confident that this will help maintain the loading of capacities," the company said, adding that its "financial state is stable, while the debt level is low."

Earlier, a source close to the company told TASS that shipments both to companies and traders had been suspended. Severstal’s contractors in the EU have no right to acquire the company’s products under the law now, the source explained. Products may be redirected to the Middle Eastern, Asian and South American markets, he added.

Apart from Mordashov, the European Union imposed sanctions on February 28 against Kremlin Spokesman Dmitry Peskov and another 24 Russian citizens, among them businessmen, top managers, military officials, politicians, journalists and cultural figures.

Severstal is a vertically integrated steel and mining company, and one of Russia’s largest steel producers. The Cherepovets Steel Mill is the company’s key asset. Its production capacity roughly totals 12 mln tonnes of steel per year.