16 Apr 2021 13:22

Raspadskaya ownership might be split among Evraz shareholders proportionately

MOSCOW. April 16 (Interfax) - The demerger of the coal assets of Evraz, which are consolidated under PJSC Raspadskaya, might be carried out by distributing the shares which Evraz directly holds in Raspadskaya, being about 90.9% of the total , to all Evraz shareholders in proportion to their existing shareholdings in Evraz, the Russian steel and mining group said in a press release.

Evraz shareholders will be given the option to sell the shares in Raspadskaya which they would be entitled to receive in such a distribution.

"It is the company's intention that such mechanism will not be dependent on funding from the post-demerger Evraz group or its major shareholders," Evraz said.

Evraz's board of directors on Thursday gave its approval for the company to move forward in its preparations for the potential demerger, and will keep shareholders updated through further announcements as appropriate.

Evraz has engaged J.P. Morgan Securities plc and Citigroup Global Markets Limited as financial advisors, and Linklaters LLP as legal advisor on the ongoing review of and preparation for the potential demerger.

Evraz said the rationale for the potential demerger includes establishing "a clear and focused equity story for each" company, and allowing "each business to concentrate on its respective ESG priorities, enhancing accountability of ESG achievements and comparability of results against peer universe."

The demerger will investors "flexibility to customise the exposure to respective sectors, earnings volatility profiles and ESG performance in accordance with investors' risk and return appetite via publicly listed instruments," the company said.

In addition, each business will be able "to adopt a capital allocation framework balancing its cash flow fluctuations, growth investment strategy and return of capital to shareholders," Evraz said.