29 October 2013
Effect of sale of NLMK Belgium Holdings’ shares on NLMK Group's consolidated financial statements
Moscow, 29 October 2013. On 30 September 2013 NLMK (LSE: NLMK) reported that Belgian state-owned company SOGEPA (Société Wallonne de Gestion et de Participations S.A.) had acquired a 20.5% interest in NLMK Belgium Holdings S.A. (NBH) for EUR 91.1m. NBH comprises the production and trading companies of NLMK Europe, other than NLMK Dansteel.
Following a review of the accounting treatment of the transaction, NLMK confirms that in light of the corporate governance rights afforded to SOGEPA the NLMK Group’s investment in NBH will be accounted for in the consolidated financial statements prepared in accordance with US GAAP under the equity method starting from 30 September 2013.
NLMK Group brought in SOGEPA as a strategic investor in the context of the continuing restructuring of its European assets aimed at further enhancing efficiency and optimizing costs.
NLMK Belgium Holdings S.A. (NBH) includes two subdivisions of NLMK Europe: NLMK Europe Strip (flat rolled products) and NLMK Europe Plate (thick plate production). NLMK Europe Strip comprises three entities with total production capacity of 1.7 m tonnes: NLMK La Louvière (Belgium), NLMK Coating (France), NLMK Strasbourg (France) and a network of service facilities. NLMK Europe Plate comprises two entities with production capacity of 0.9m tonnes: NLMK Clabecq (Belgium) and NLMK Verona (Italy). NLMK Dansteel (Denmark) with production capacity of over 0.4m tonnes, which used to be an entity within NLMK Europe Plate, is not included within the NBH perimeter.
NLMK is a vertically integrated steel company. NLMK's manufacturing assets are located in Russia, Europe and USA. The company's liquid steel capacities exceed 17m tonnes a year. In 2012, the company's revenue was USD 12.2bn and EBITDA was USD 1.9bn. OAO NLMK ordinary shares are traded at the Moscow Stock Exchange (MICEX-RTS) and its global depository shares are traded at the London Stock Exchange.