The Ukrainian management company System Capital Management (SCM), a mother company of Metinvest Holding (Metinvest), and Smart-Holding (Smart) have agreed on terms for the merger of their metallurgical assets.
Accordingly, under the terms of the merger, SCM will transfer 25 percent + 1 share in Metinvest to Smart.
On the other hand, Smart will transfer an 82.46 percent stake in Inguletskiy GOK directly to Metinvest, to be followed by a further 17.3 percent stake after receipt of permission from the Ukrainian State Property Fund.
Furthermore, after receiving consent from the relevant European authorities, Smart will transfer a 90.18 percent stake in Makeevka and a 90 percent stake in Bulgaria-based steel producer Promet Steel to Metinvest. The deal regarding these two mills is expected to be completed by the end of the first quarter of 2008.
Meanwhile, the parties have yet to agree on the terms of transfer of South GOK (UGOK). According to the previously agreed terms, Smart is to transfer no more than 25 percent in UGOK to Metinvest. However, according to the agreement, the volume of the stake in UGOK to be transferred to Metinvest can be increased to 50 percent following the receipt of approval for the deal from the Ukrainian Antimonopoly Committee.