Former Soviet steel companies towards transparency

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.