Severstal reached an agreement to sell Dneprometiz

PJSC Severstal announced that its Austrian subsidiary Severstal Trade Gmbh has entered into a definitive agreement to sell PJSC Dneprometiz to a German private company. An interesting fact is that Dneprometiz was created in 1890 by the Joint Stock Company of Steel Mills, which belonged to the German industrialist Bernard Gantke.

Since then, Dneprometiz has become a large Ukrainian enterprise for the production of steel wire, fasteners, nails, nets. The company also sells metal-cutting, forging and lifting equipment. The plant's products are used in construction, mechanical engineering, agriculture and other areas. PJSC Dneprometiz operates under the management of Severstal Metiz, a group of companies that unites enterprises for the production of metal products, but the plant is not operationally connected with the enterprises of Severstal in Russia.

The sale of PJSC Dneprometiz will further improve the efficiency of Severstal metiz's operations and will also enable Severstal to increase its overall profitability.

Severstal acquired a 60 percent stake in Dneprometiz in 2006 and increased its stake to 98.6 percent. This package is currently fully sold. The deal is expected to close in 2015, subject to antitrust monitoring and other normal conditions for closing the deal.

Currently, Dneprometiz continues to demonstrate high capacity utilization and good performance, delivering to the markets of Ukraine, the CIS countries and Europe. However, for the vertically integrated steel and mining company Severstal, it makes sense to get rid of a production unrelated facility.