10/24/08
Industry in Ukraine
Czech Company to Buy Into Ukraine Iron Producer
By Oleg Lavrentyev, Nova Mova staff writer, from Internet sources.
A Czech coal-mining company, New World Resources (NWR), will buy 25 percent of a Ukrainian iron ore producer owned by the Switzerland-based company, Ferraxpo. Ferraxpo has been forced to sell shares of the company due to a recent plunge in the company’s stock value.
The value of the transaction is reported to be approximately US$ 217.5 million. The purchase will be funded from NWR’s existing cash reserves, and the company will have a place on Ferraxpo’s board of directors.
Ferrexpo produces more than nine million tonnes of iron-ore pellets a year, 85 percent of which is exported to steelmakers around the world.
The company also produces 30 million tonnes of basic iron ore. Ferrexpo is controlled by Kostyantin Zhevago, a Ukrainian billionaire businessmen and politician, who was faced with a margin call by JPMorgan after Ferrexpo’s shares were hit by the selloff in commodities stocks. Zhevago still holds 51 percent of the company through his investment vehicle Fevamotinico.
The value of the transaction is reported to be approximately US$ 217.5 million. The purchase will be funded from NWR’s existing cash reserves, and the company will have a place on Ferraxpo’s board of directors.
Ferrexpo produces more than nine million tonnes of iron-ore pellets a year, 85 percent of which is exported to steelmakers around the world.
The company also produces 30 million tonnes of basic iron ore. Ferrexpo is controlled by Kostyantin Zhevago, a Ukrainian billionaire businessmen and politician, who was faced with a margin call by JPMorgan after Ferrexpo’s shares were hit by the selloff in commodities stocks. Zhevago still holds 51 percent of the company through his investment vehicle Fevamotinico.
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