On April 8, Russian steelmaker Novolipetsk Steel (
NLMK) announced its decision to sell its 100 percent holding in Independent Transportation Company LLC (NTK) to UCL Rail B.V., a subsidiary of Universal Cargo Logistics Holding B.V. (UCL Holding).
Accordingly, the cash consideration in the transaction is $325 million and assumes that the net debt of NTK at the completion of the transaction will be around $236 million.
NLMK previously signed a long-term agreement with NTK for the continuation of transportation and rail logistics services to
NLMK, thus ensuring its transportation security. NTK will render transportation services to
NLMK and other freight owners using rolling stock owned by UCL Holding, one of the largest car fleet owners in
Russia. As a result,
NLMK's transportation needs will be fully met. Moreover, the arrangement will result in cost efficiencies for
NLMK due to a substantial growth in the scale of business operations of the carrier.
UCL Holding (controlled by Fletcher Group Holdings Limited, which is
NLMK's majority shareholder), operates over 40 entities in
Russia. UCL Holding offers a comprehensive range of stevedoring, freight by sea and river, passenger river transportation, ship building and ship maintenance, and logistic services.