International Steel Mills

Evraz Denies US Assets For Sale

July 8, 2014

Media reports that Russian steelmaker Evraz is considering selling shares of its North American operations in an effort to reduce debt are unfounded according to a spokesperson at Evraz.

“EVRAZ is not planning to sell its North American assets and in fact remains completely committed to our operations and continuing to grow our business in North America. From time to time, EVRAZ considers various financing opportunities; however, there are currently no firm plans with respect to any particular financing related to the EVRAZ North American operations,” said an Evraz spokesperson in an email to SMU.

Valued at $1.5 billion, as estimated by BCS financial analyst Kirill Chuyko, Evraz NA is comprised of eight steel manufacturing and 18 recycling facilities in the U.S. and Canada. The North American operations produce more than five million tons of flat rolled (plate), long and tubular steel products annually that are used in infrastructure, energy, defense and rail.

For 2013, Evraz reported a net loss of $572 million and a 2.5 percent increase in net debt to $6.5 billion. North American sales fell two percent in 2013 to $3,242 million.

Evraz closed its Claymont facility in Delaware in October 2013, citing subdued market demand and import competition as reasons.

BD Live reported that two sources close to the company had said Evraz was considering selling of shares of its US operations.

“The idea of a possible share sale of the North American unit has nothing to do with the crisis in Ukraine as the company and its owners are weighing this opportunity purely to help to cut debt,” said Deutsche Bank analyst George Buzhenitsa in the BD Live report. Evraz and co-owners Roman Abramovich, Alexander Abramov and Alexander Frolov are not on the U.S. and EU sanction list.

Evraz is not the first Russian steelmaker to consider selling off its North American divisions. Russian OCTG pipe maker TMK considered selling shares of its North American operations but decided against it due to unfavorable market conditions. Severstal is currently accepting bids for its U.S. facilities.

Russia Behind the Headlines (RBTH) noted in a May 2014 article that although Russian companies are denying that the political unrest in the Ukraine and threat of sanctions is prompting withdrawal from US investment, there has been a shift in focus from Europe and the U.S. to Asia and the Russian domestic markets.

Headquartered in Chicago, Evraz North America has a crude steel capacity of 2.6 million tons annually. Annual capacity for flat rolled products is 2.3 million