MOSCOW, Oct. 16, 2013 (GLOBE NEWSWIRE) -- Mechel OAO (NYSE:MTL) , one of the leading Russian mining and metals companies, reports that its extraordinary general shareholders' meeting approved issuing of guarantee by Mechel OAO for performance of Mechel Group sellers' obligations under the sale-purchase agreement (including but not limited to sellers' warranties) to the buyer, Yildirim Group. This guarantee is a condition precedent for the deal's closure.
According to the sale-purchase agreement signed in July 2013, Mechel Group sells its 100% stake in Tikhvin Ferroalloys Plant and Voskhod Mining Plant. Mechel Group's companies act as formal sellers and an SPV within Yildirim Group acts as a buyer. The deal amounts to 425 million US dollars. The deal is due to be closed by the end of 2013.
Editor's note:Tikhvin Ferroalloy Plant – Located in Tikhvin, Leningrad Region, it is a modern enterprise of a capacity to produce up to 120,000 tonnes per annum of high-carbon ferrochrome used to produce stainless steel. As raw material, the plant uses the chrome ore concentrate produced at Voskhod mining plant. Voskhod Mining Plant – Located in Khromtau, Kazakhstan, it includes a modern chrome ore mine and a beneficiation plant for further processing of the ore and producing chrome ore concentrate. Voskhod's proved and probable reserves total 20 million tonnes of ore according to JORC standards. Yildirim Group — a Turkey-based private diversified industrial group comprising enterprises from ten different industries in various countries. The Group is the owner of ETI KROM INC., Turkey's largest producer of chrome ore as well as high-quality high-carbon ferrochrome, and of VARGÖN ALLOYS AB, one of the oldest ferrochrome plants in Sweden. The Group is the world's largest hard lumpy chrome ore producer as well as the world's second largest high-quality high-carbon ferrochrome producer. Mechel is an international mining and steel company which employs over 80,000 people. Its products are marketed in Europe, Asia, North and South America, Africa. Mechel unites producers of coal, iron ore concentrate, steel, rolled products, ferroalloys, heat and electric power. All of its enterprises work in a single production chain, from raw materials to high value-added products.