June 15, 2007 – Evraz Group S.A. (LSE: EVR) (“Evraz”) announces that Evraz’s Board of Directors has made the following decisions regarding the Yuzhkuzbassugol coal company:
The Board has approved a plan to combine businesses of Yuzhkuzbassugol and Raspadskaya coal companies. Exact terms and structure of the transaction are expected to be finalised in the second half of 2007. The combination is subject to Raspadskaya shareholders’ as well as various regulatory approvals.
Upon completion of this transaction, Raspadskaya will own 100% of shares in Yuzhkuzbassugol. Evraz will continue to hold its shares in Raspadskaya through Corber Enterprises Limited (“Corber”), a joint venture with Raspadskaya coal company management. As a post-transaction result, Evraz will exercise management and shareholder control in both Corber and Raspadskaya.
The Board has also agreed to appoint Gennady Kozovoy, Raspadskaya CEO, as the new CEO of Yuzhkuzbassugol with effect from June 16, 2007.
Gennady Kozovoy, CEO of Raspadskaya and proposed CEO of Yuzhkuzbassugol, said: “I look forward to this new challenge. My top priority is to improve safety standards at all the mines of the combined company and ensure maximum control over the company’s operations in order to achieve superior results of the combined company in the interests of all company’s stakeholders”.
Alexander Frolov, Evraz’s Chairman and CEO, commented: “Through combination we will create a Russian coking coal leader and a top-three global coking coal producer distinguished through the best resource base, world-class management team, strong growth profile and significant export potential. The combined company will have Evraz’s steel mills located in Siberia and the Urals as its main and largest customers. This combination will serve the best interests of both companies’ shareholders.”
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