The Russian steelmaker Novolipetsk Steel (NLMK) has announced the acquisition on July 15 of an additional 25 percent stake in Nizhneserginsky Metalware-Metallurgical Plant (NSMMZ), a production facility belonging to Maxi Group which in turn is a subsidiary of NLMK. Considering the 32 percent NSMMZ stake acquired in the loans-for-shares auction conducted on June 25, 2009, NLMK's direct ownership in NSMMZ has now increased to 57 percent.
Prior to this acquisition, a 25 percent stake in NSMMZ had been pledged by one of NSMMZ's creditors and was redeemed by NLMK by direct guarantee. The transaction for the acquisition was closed at a market price based on the results of an open auction for NSMMZ shares held on 25 June 2009.
"This acquisition will enable NLMK to more efficiently manage its subsidiaries comprising its long steel segment. Moreover, since the load of financing investment and operational activities of Maxi-Group assets lay upon NLMK, the acquisition of the stake in this major production asset of Maxi-Group allows NLMK to provide guarantees while investing in Maxi-Group assets," reads NLMK's release on the issue.
NSMMZ is one of the main producers of billets and longs in Russia's Ural region. The steelmaker has an annual steel smelting capacity of 2.1 million mt, with an annual capacity of rolled steel products of 1.4 million mt.