Evraz not to attract investors to coal assets after spin-off

MOSCOW, Aug 5 (PRIME) -- U.K.-based mining giant Evraz, which operates mainly in Russia, does not plan to attract investors to the coal assets consolidated on the basis of Raspadskaya and which the company plans to spin off, President Alexander Frolov told reporters on Thursday.

“We plan to spin off Evraz’ coal assets and work to choose a mechanism and specific terms is going on. We hope that the spin-off happens until the end of the year. As a result, the current Evraz shareholders will get a chance to own shares in Raspadskaya directly. Regarding attraction of other investors to the capital of the coal business, we have no such plans,” he said.

Frolov owns a 9.65% stake in Evraz, and plans to remain a shareholder of Raspadskaya as well.

Evraz Vice President for Finance Nikolai Ivanov told reporters that the company might maintain the ratio of net debt to earnings before interest, taxes, depreciation, and amortization (EBITDA) at 1x until the end of the year.

“We don’t plan any debt payments until the end of this year. We are only preparing to refinance the Eurobonds we are to redeem in January 2022. We see no significant problem with that as cash on accounts of the company exceeds U.S. $1.4 billion. We are studying different options for refinancing. The Eurobonds and banking funds are all available,” Ivanov said.

Frolov also said the launch of a new vanadium plant approved by the board of directors will not have any noticeable impact on Evraz’ capital expenditures. Total investment in the plant until 2025 was estimated at around $228 million, while the company’s annual capital expenditures for the next three years are planned at $1 billion, he said.

“Speaking of the Tula project, it is about processing of vanadium slag produced at Evraz NTMK and that we process at third parties now. The processing capacities of the new plant are 12,000 tonnes of vanadium in slag. After the project is implemented, all our demands in processing of slag will be covered,” he said.

Evraz expects Russia’s metals export duties to have a serious impact on exports of the company, Frolov said.

“We see certain contraction in exports in August. For instance, the sales of square billets will contract by 40,000–50,000 tonnes. In the remaining period until the end of the year, it is difficult to forecast because much will depend on the market situation,” he said, adding that there is the risk that Evraz will have to reduce production.

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