Evraz buys Inprom for $40 mln, some of cost deferred
MOSCOW. April 29 (Interfax) - The price tag on Russian steel major Evraz Group's acquisition of Inprom, a leading Russian steel services operator, is $40 million, of which $21 million will be paid at a later date, Evraz Group's annual financial report says.
As reported previously, Evraz Group acquired 100% of the stock in Cassar World Investments Corporation, which controls 99.9% of Inprom, last December. With the consolidation of assets EvrazMetal and Inprom, the group intends to set up a major metal-sales network in the Commonwealth of Independent States. Evraz's stake in the new company will be 75%, and Inprom shareholders will have the other 25%. Evraz has not specified a price tag or other details, but a sector source told Interfax that the deal does not involve money, as the group has shouldered the trader's debts to Sberbank of Russia .
In the period December 22-31, during which Inprom's financials were consolidated into the group's reporting, it posted losses of $1 million, there was $8 million on the accounts of the absorbed company, and the group spent $18 million on the buy.
Evraz exercised a put option to acquire full control over the company Frotora Holdings Ltd, with "the rights under a long-term lease of land to be used for a construction of a commercial sea port in Ukraine," the report says. "These rights are included in contract terms category of the intangible assets. In 2010, the Group recognized an impairment loss of $30 million in respect of these rights due to the change in plans for the use of this land," it says.
Evraz Group is a major vertically integrated mining and metals company with assets in Russia, the United States, Italy, the Czech Republic, and the Republic of South Africa.