MOSCOW, April 8, 2008 /PRNewswire-FirstCall/ -- Mechel OAO (NYSE: MTL),one of the leading Russian mining and metals companies, announces its purchaseof 100% stake in Ductil Steel of Romania. The purchase is in line with furtherstrategic development of Mechel's steel segment, and is also aimed atmaintaining Mechel's position in the Romanian rolled and wire product marketsof Romania.
On March 28, 2008, Mechel's subsidiary, Mechel International Holdings AG,Switzerland, received approval from the Romanian Antimonopoly Committee toacquire the sole control of Ductil Steel.
On April 8, 2008, Mechel acquired 100% of the charter capital of DuctilSteel for EUR 142.0 million (USD 221.0 million). The purchase price includes180,000 ordinary shares from Lakewind Limited.
Ductil Steel has the following production facilities: Ductil Steel Buzauplant (Buzau, Romania), which produces carbon and low alloyed steel rolled andwire products and Otelu Rosu plant (Otelu Rosu, Romania) which produces steeland billets for rolling, which are supplied to Ductil Steel Buzau and to thirdparties both domestically and abroad for further processing.
In 2007, Ductil Steel produced approximately 340,000 tonnes of liquidsteel, 320,000 tonnes of billets for rolling, 180,000 tonnes of rebars,105,000 tonnes of different sorts of wire, 68,000 tonnes of wire rod, and48,000 tonnes of mesh.
Mechel OOO Chief Executive Officer Vladimir Polin commented on thetransaction, 'The integration of Ductil Steel's production and marketingfacilities will allow Mechel to further develop its steel business,particularly in Romania and Eastern Europe, and will contribute to the economyof Romania, where two other Mechel's subsidiaries currently operate -- MechelTargoviste and Mechel Campia Turzii. In addition, this acquisition willfurther optimize our existing production chain while reducing costs.'
Mechel is one of the leading Russian companies. Its business includesthree segments: mining, steel, and power. Mechel unites producers of coal,iron ore concentrate, nickel, steel, rolled products, hardware, heat andelectric power. Mechel products are marketed domestically and internationally.
Some of the information in this press release may contain projections orother forward-looking statements regarding future events or the futurefinancial performance of Mechel, as defined in the safe harbor provisions ofthe U.S. Private Securities Litigation Reform Act of 1995. We wish to cautionyou that these statements are only predictions and that actual events orresults may differ materially. We do not intend to update these statements. Werefer you to the documents Mechel files from time to time with the U.S.Securities and Exchange Commission, including our Form 20-F. These documentscontain and identify important factors, including those contained in thesection captioned 'Risk Factors' and 'Cautionary Note RegardingForward-Looking Statements' in our Form 20-F, that could cause the actualresults to differ materially from those contained in our projections orforward-looking statements, including, among others, the achievement ofanticipated levels of profitability, growth, cost and synergy of our recentacquisitions, the impact of competitive pricing, the ability to obtainnecessary regulatory approvals and licenses, the impact of developments in theRussian economic, political and legal environment, volatility in stock marketsor in the price of our shares or ADRs, financial risk management and theimpact of general business and global economic conditions.
SOURCE Mechel OAO
