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Russia's Magnitogorsk to pay 96% of 2006 profit as dividends

OAO Magnitogorsk Iron & Steel, the closely held owner of Russia's biggest steel mill, will direct 96% of 2006 profit to investors as it prepares for an April public share offering.

The board of Magnitogorsk, based in the Ural mountains city of the same name, approved a full-year dividend of 0.891 rubles a share, the company said yesterday on its Web site. Added to half-year and nine-month dividends, the full payment comes to 34.1 billion rubles ($1.31 billion), just short of the $1.37 billion Magnitogorsk earned in 2006. The steelmaker increased its number of shares by 13.6% this January in preparation for a London listing. The company will offer those shares through Mintha Holding Ltd., Vedomosti said today, citing company documents.

Based on Magnitogorsk's market value today in Moscow, the stake is worth $1.36 billion. The share sale would be the fifth by a Russian steel company, as owners look to raise cash during a period of rising prices for the metal. Magnitogorsk plans to sell 13.6% of new shares after the IPO, Vedomosti said, citing an unidentified person familiar with the transaction. The current owners will buy the second lot of new shares to make sure the company earns cash from the sales. Yelena Azovtseva, a spokeswoman for Magnitogorsk, could not be reached for comment after several calls to her office and mobile phone. (Bloomberg)