The Russian steelmaker Severstal has agreed with US-based PBS Coals Corporation (PBS) to acquire the company's business for C$382 million (approx. $302 million) less than it bid in August, following the decrease in coal and steel prices.
In the month of August of the current year, Severstal intended to purchase the business of PBS, through the acquisition of Penfold Capital Acquisition Corporation (Penfold), for a total of $1.3 billion, in order to secure stable coking coal supplies for its US-based operations, thereby maximizing its production and profit potentials.
PBS's principal holders, who hold about 80 percent of the company, have since agreed to an aggregate reduction of the proceeds payable in order to resolve the outstanding matters between the company and Severstal.
The offer price of C$8.30 per share offered to non-principal shareholders remains unchanged.
PBS is engaged in the mining, processing and sale of coking and thermal coal in Somerset County, Pennsylvania, US, and has an annual production capacity of over four million mt of coking coal.