Novolipetsk Steel (NLMK) and Duferco Group are pleased to announce that Duferco U.S. Investment Corporation and Esmark have formed a consortium to purchase the assets of Winner Steel, based in Pennsylvania, USA. The consortium has entered into a letter of intent with Winner Steel. The transaction remains subject to further negotiation and execution of a definitive asset purchase agreement and other conditions. It is currently expected to be completed in the second quarter of 2007.
Duferco U.S. Investment Corporation is a wholly-owned subsidiary of Steel Invest & Finance S.A. (Luxembourg), a 50/50 joint venture between the Duferco Group and Novolipetsk Steel.
Winner Steel is one of the largest independent galvanized steel producers in the United States. Its operations are located on a single site in Pennsylvania and include three galvanizing lines with combined annual capacity of around 1.2 million tonnes and production in 2006 of around 0.6 million tonnes.
The main applications of the galvanized steel produced by the company are in the construction, appliances and automotive industries. Winner Steel is located close to the Farrell facility, which is already part of the NLMK-Duferco JV, and is one of the primary suppliers of cold-rolled steel to the galvanizing industry, including Winner Steel.
Alexey Lapshin, NLMK President and a board member of Steel Invest and Finance S.A, said:
“We welcome this development in the business of our joint venture with the Duferco Group. It will provide for an increase in value-added products and further expansion into the large North American market. We are delighted to have Esmark, one of the most dynamic companies in the US steel industry, as our partner in this project.”
Benedict Sciortino, Director of the Duferco Group and a board member of Steel Invest and Finance S.A, said:
“Being located just next to our Farrell facility in Sharon, Winner Steel is a logical component of our North American growth strategy. The acquisition is likely to create substantial synergies by ensuring a stable supply of cold-rolled material to Winner Steel and by increasing the downstream exposure of the NLMK-Duferco JV. We are delighted to work together with Esmark on this transaction and are hopeful that it may lead to successful joint projects in the future.”
About Novolipetsk Steel
Novolipetsk Steel (NLMK) is one of the world’s leading steel companies and one of the three largest flat steel producers in Russia, producing over 9 million tonnes of crude steel annually. NLMK’s production facilities are among the most technologically advanced in Russia, producing flat steel products in a variety of grades and sizes. NLMK is one of the world’s most profitable steel companies with EBITDA margin over 40%.
The traditional strengths of the Company are: vertical integration into raw materials, world class assets with a competitive cost of production, proximity to mature and developing markets where the company has strong positions, sound financial performance, professional and experienced management team.
For further information visit www.nlmksteel.com
About Duferco Group
Duferco Group is an international steel production, processing and trading group with headquarters in Lugano, Switzerland. Duferco had revenues in excess of USD 7 billion in 2005, and is one of the world’s largest companies engaged in the worldwide production, distribution and trade of all types of steel products, including raw materials used in steel making processes. Duferco has trading and production activities in more then 40 countries. It operates steel making and processing plants in Western and Eastern Europe, USA, South Africa and Central America.
For further information visit www.duferco.com
About Steel Invest & Finance S.A
NLMK and Duferco Group formed a joint venture through Steel Invest & Finance S.A. (Luxembourg), a limited liability company (société anonyme) established under the laws of Luxembourg in which they both hold a 50% interest. The joint venture holds 100% or majority interests in 23 companies including one steel making plant and five steel rolling facilities with total finished steel output of 4.5 million tonnes in 2006 as well as a network of steel service centers.
About Esmark Inc.
Headquartered in Chicago, USA and founded by the Bouchard Group, Esmark is a steel services family of companies. The mission of Esmark is to establish the benchmark standards for strategic consolidation, operating efficiency and management excellence in the steel sector.
For further information visit www.esmark.com
About Winner Steel
Winner Steel is one of the largest independent galvanized steel producers in the United States. Its operations are located on a single site in Pennsylvania and include 3 galvanizing lines with combined annual capacity of around 1.2 million tonnes and production in 2006 of around 0.6 million tonnes.
For further information visit www.winnersteel.com