MOSCOW, Sept. 25, 2012 (GLOBE NEWSWIRE) -- Mechel OAO (NYSE:MTL) , one of the leading Russian mining and metals companies, reports decisions made by the Board of Directors.
Mechel OAO's Board of Directors held a meeting on September 21, 2012, with the agenda including, among other issues, the measures on restructuring the Group's assets in order to improve the company's financial performance and increase its shareholder value, in view of the revised strategy approved in May this year. We reiterate that the revised strategy for Mechel OAO's development envisions focusing on such priority areas as mining and full-cycle steelmaking with an emphasis on production of long products and high value-added products, including specialty steel, stainless steel and hardware.
Based on the results of an analysis of Mechel OAO's assets presented by the management, the Board of Directors unanimously approved divestment of the following assets as not consistent with the new development strategy: enterprises that make up Mechel's Eastern European Steel Division S.R.L., Donetsk Electrometallurgical Plant PJSC (Ukraine), Invicta Merchant Bar Ltd. (UK), UAB "Mechel Nemunas" (Lithuania), Mechel Service Global B.V. (except Mechel Service OOO (Russia)), Voskhod-Chrome LLP (Kazakhstan), Voskhod-Oriel LLP (Kazakhstan), Tikhvin Ferroalloy Plant OOO (Russia), Southern Urals Nickel Plant OAO (Russia), Kuzbass Power Sales Company OAO (Russia), Toplofikatsia Rousse EAD (Bulgaria).In order to speed up implementation of the mining division's priority project — development of the Elga coal deposit — the Board of Directors also recommended evaluating the possibility of a potential divestment of a minority stake in Mechel Mining OAO to a strategic partner (but such stake not to exceed 25%). Mechel OAO's Chief Executive Officer Yevgeny Mikhel commented on the Board of Directors' decisions: "We took an important practical step in implementing the Group's renewed strategy. The decisions made by the Board of Directors are fully in line with Mechel's declared course on improving our operational efficiency, development of those investment projects that are most promising from an opportunity costs standpoint, and will enable us to focus on priority business areas, work on systematically reducing the level of indebtedness and improving the company's shareholder value. I will note that any divestment deals within the framework of Mechel OAO's renewed strategy would be subject to receiving proposals at compelling terms that the Board of Directors consider to be in the best interest of all shareholders."