Paper- Czech Acquisition, Falling Manganese Prices Compels EvrazHolding to Pull-out from Deal

The Russian financial newspaper Vedomosti reports that Russia’s Evraz Holding decided to pull out from a privatisation deal of Georgia’s Chiatura Manganese Factory as a result of falling manganese prices, which no longer justify the refurbishing of the Chiatura factory.

Instead, Evraz Holding plans to direct funds to Czech Vitkovice Steel. The Czech government announced yesterday that Mastercroft – a member company of Evraz Holding – won the privatisation deal worth USD 286.9 million.

Financial analysts told Vedomosti that the price for Manganese has fallen on the Chinese market from USD 1,600 to USD 950 per ton since September last year. Under such market conditions, major investment in the Chiatura Manganese is no loger a guarantee of healthy returns.

Vitkovice Steel is one of the largest producers of thick metal sheets in Europe. EvrazHolding made an initial public offering of 8.3% of its shares at the London Stock Exchange and hopes to expand its business in the European market.

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