Russian steelmaker Novolipetsk Steel (NLMK) has stated that it is proceeding with the restructuring of its European assets to further improve efficiency and optimize costs with an investment by SOGEPA (Société Wallonne de Gestion et de Participations S.A.), a Belgian state-owned company, in NLMK Europe.
The restructuring program for NLMK's European assets was initiated in 2008 as part of a joint venture with Duferco Group, the world's largest independent steel trader. In 2011, pig iron, steel, and long product operations were carved out from NLMK's European assets. In March 2013, the next step of the restructuring program was completed with an agreement signed with trade unions for the reorganization of the NLMK La Louviere site in Belgium. This agreement included, among other things, a plan to reduce staff numbers by 30 percent. These and other efficiency improvement measures have already led to a reduction in fixed costs of almost 50 percent.
In a further phase of restructuring announced on Monday, September 30, SOGEPA has acquired a 20.5 percent stake in NLMK Belgium Holdings S.A. (NBH), which comprises NLMK Europe's operating and trading companies, excluding NLMK Dansteel, for a purchase price of €91.1 million. The agreement provides NLMK Group and SOGEPA with respective call and put options over SOGEPA's shares commencing on December 31, 2015. In addition, SOGEPA will be granted certain governance rights over NBH and its subsidiaries, and key management decisions will be taken jointly by NLMK and SOGEPA. The board of NBH will be comprised of four representatives of NLMK Group and two representatives of SOGEPA.