MOSCOW, Dec 25 (PRIME) -- Russian state development corporation VEB.RF and mining giant Evraz may create a joint venture basing on coal producer Sibuglemet, Vedomosti business daily reported on Tuesday quoting sources.
VEB.RF may contribute Sibuglemet to the joint venture to get a 25% stake, while Evraz may obtain a 75% stake after contributing coal producers Yuzhkuzbassugol, Raspadskaya, and Mezhegeiugol. According to a source familiar with a top manager of Evraz, the companies may close the deal in 2019, the business daily reported.
One of the sources told Vedomosti that Sibuglemet’s debt amounts to U.S. $2.5 billion, of which debt to VEB.RF accounts for $2.3 billion.
Maxim Khudalov, director of the corporate ratings group at the Analytical Credit Rating Agency (ACRA), told the business daily that Sibuglemet’s value may amount to about $3 billion, and its debt will be most likely transferred to the joint venture. Evraz’ net debt stood at $3.9 billion as of the end of June, so its debt burden may stand at about 2.5x of earnings before interest, taxes, depreciation, and amortization (EBITDA) after creation of the joint venture, Khudalov said.
According to the materials of CDU-TEK, which provides data and analysis to Russia’s Energy Ministry, the joint venture may drive Evraz’ coking coal output to 28.5 million tonnes per year and its market share may rise to 33.8% from 26.5%. BCS Global Markets’ Senior Analyst Oleg Petropavlovsky said that the venture may allow Evraz to cover its internal demand in coking coal completely and become Russia’s largest exporter of it.
Evraz and VEB.RF declined to comment, while a representative of Sibuglemet did not respond.
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