Former Soviet steel companies towards transparency
Having surpassed the oil companies in terms of profit, several steel companies in
Russia and
Ukraine are taking steps to increase their transparency.
For instance, Magnitogorsk Metal Works (
MMK) is considering an IPO for the second half of 2005 in order to raise cash for new
investments. The IPO would better position
MMK in the international finance markets, which will also help it expand its share in the global market. The company has previously issued Eurobonds.
With the cash,
MMK intends to increase its raw material resources through backwards integration. The company is considering a takeover of several raw material producers in
Ukraine. In addition,
MMK plans to acquire the Sokolovsk-Sarbaisk mining and processing plant in
Kazakhstan. If
MMK fails to acquire the Sokolovsk-Sarbaisk plant, which
MMK rival Uralskaya Steel is also eyeing, it may look to
Australia to cover its raw material needs.
Furthermore, Alfa Bank
Ukraine has announced that
Ukraine's largest metal companies are applying to issue IPO's, which will require them to open their books and thus increase their transparency.