MMK gets $131 mln for half of transport subsidiary instead of anticipated $125 mln
MOSCOW. Aug 28 (Interfax) - OJSC Magnitogorsk Iron & Steel Works (MMK) received $131 million for the sale of half of LLC MMK-Trans (renamed Steeltrans) instead of the previously anticipated $125 million.
"The final size of remuneration was agreed in July 2013 on the basis of data from MMK-Trans' approved financial report for 2012, prepared in accordance with International Financial Reporting Standards (IFRS), and it totaled $131 million," MMK materials say.
Globaltrans reached an agreement to buy MMK-Trans in December 2012 for $250 million, including net debt and working capital of $84.5 million. MMK was to get half of this amount in proportion to its stake in the carrier.
"In the end, upon agreement by the parties, MMK received slightly more than half of the total value for its stake, although the final cost of the consolidation didn't change," a spokesman for MMK told Interfax. He did not disclose the details of the agreement, citing confidentiality.
Besides MMK, MMK-Trans' previous shareholders were Globaltrans chief executive Sergei Maltsev and chairman Alexander Yeliseyev, who owned 37.5% each, and MMK Trans management, with 12.5%.
Globaltrans simultaneously secured a five-year contract with MMK, which indicates that it will provide railway shipments for at least 70% of MMK's freight. Around 12,000 railcars will be used for that purpose.