Evraz Group may issue Eurobonds to refund $1.8 bln loan


A spokesman for the Evraz Group S.A. said on Friday the company is considering the issue of Eurobonds to refund a $1.8 billion loan obtained for the purchase of Oregon Steel Mills.

The company, which is Russia’s largest steel and mining group, signed an agreement to secure the syndicated loan with Credit Suisse and UBS last December. “We are considering different opportunities to refinance the loan, including through a Eurobond issue. The deadline for refunding the debt is mid-May 2008, but we want to do it by the turn of this year,” Evraz Vice President Pavel Tatyanin said in a phone conference. Tatyanin said the company’s debt was $5 billion as of June 30, of which 60% was long-term liabilities. Evraz completed a deal to buy a 91.5% stake in Oregon Steel Mills, one of the most diversified steel manufacturers in North America, for $2.3 billion in January. The company produces a wide range of specialty steel products, and is also one of two armor plate suppliers in the United States for Humvee Army jeeps ordered by the US Defense Department.

The Evraz Group is one of the world’s largest steel and mining companies, with operations mainly in Russia. It includes three of Russia’s top steel companies, - Nizhny Tagil (NTMK) in the Urals region, West Siberian (ZapSib) and Novokuznetsk (NKMK) in Siberia. Evraz accounts for over 20% of global vanadium output. The company doubled its net profit calculated to International Financial Reporting Standards (IFRS) to $1.126 billion, year-on-year, in the H1 of 2007. In 2006 Evraz posted a 51% rise in net profits, to $1.385 billion, from 2005, and its sales grew 27.4% to $8.292 billion. In 2007 the company plans to keep steel output at 2006 levels of 16 million metric tons. In August 2006, the Evraz Group sold 41% of its stock to UK-based Millhouse Capital, which manages Russian billionaire Roman Abramovich’s assets. The company did not disclose the price, but experts estimated the deal at $2.7-3 billion. (rian.ru)

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