Russian billionaire Abramovich plans to increase stake in key coal asset

Roman Abramovich. Photo: Sergey Savostyanov TASS

The Russian anti-trust regulator the Federal Anti-Monopoly Service (FAS) has allowed Evraz, a British multinational vertically integrated steel making and mining company, owned by a Russian billionaire Roman Abramovich to buy a stake in Raspadskaya, one of Russia’s largest coal mines.

This is the first step towards spinning off Raspadskaya from Evraz by transferring it to the holding's shareholders. According to analysts, although the spin-off of coal assets will reduce the margin of Evraz's business, it will generally make the company more stable.

Under the terms of the deal, Greenleas International of Roman Abramovich may buy 26.74% of Raspadskaya. Greenleas International owns 28.64% of Evraz stake.

As part of the plans of Evraz is to complete the spin-off of coal assets by the end of the year by distributing shares of the coal company among all shareholders in proportion to their shares.

Preparations for the spin-off began in November 2020, when Evraz consolidated coal assets on the basis of Raspadskaya. At present the Raspadskaya production complex includes seven mines, two open-pit mines and three processing plants in the Kemerovo Region and one mine in Tuva. The combined company's reserves will amount to 1.9 billion tons of coal. According to Raspadskaya's presentation, the combined company’s revenue from the coking coal segment will amount to US$2 billion. This will allow it to enter the five largest world companies.

By: Eugene Gerden