MOSCOW, Russia and TORONTO, Oct. 25 /CNW/ - Through its mining division
Severstal Resources, OAO Severstal (LSE: SVST; RTS: CHMF, "Severstal")
announced that the offer (the "Offer") by 7027940 Canada Limited (the
"Offeror"), an affiliate of Severstal, to purchase the outstanding common
shares of PBS Coals Limited (formerly, Penfold Capital Acquisition
Corporation)(TSX: PBS) expired at 11:59 p.m. on October 24, 2008.
In order to resolve outstanding matters between PBS Coals Limited and the
Offeror, the principal shareholders of PBS Coals Limited and Mincorp
Acquisition Corp's management shareholders have agreed to an aggregate
reduction of the proceeds payable to them of US$300 million. The offer price
of C$8.30 per share offered to shareholders other than the principal
shareholders remains unchanged. The principal shareholders represent
approximately 80% of the outstanding shares of PBS Coals Limited and include
institutional, individual shareholders, each member of the board of directors
of PBS Coals Limited and each member of management who is a shareholder of
Mincorp Acquisition Corp.
All of the conditions to the Offer, including the minimum tender
condition, which required at least 66 2/3% of the common shares being validly
deposited and not withdrawn at the expiry time, have been satisfied or waived.
Approximately 140,650,905 common shares of PBS Coals Limited, which represents
approximately 95% of the outstanding shares of PBS Coals Limited (calculated
on a fully-diluted basis), have been tendered and not withdrawn pursuant to
the Offer. The Offeror intends to take-up the shares deposited under the Offer
as soon as practicable and in any event has agreed to by the close of business
on November 3rd, 2008.
As agreed with PBS Coals Limited, payment to shareholders who deposited
their shares to the Offer will be made as soon as practicable and in any event
by the close of business on November 5th, 2008 (subject to regulatory
The Offeror intends to acquire all shares not tendered to the Offer
pursuant to a compulsory acquisition transaction under the Canada Business
Corporations Act. Upon successful completion of such acquisition, the Offeror
intends to de-list the shares of PBS Coals Limited from the Toronto Stock
PBS is engaged in the mining, processing and sale of metallurgical and
thermal coal in Somerset County, Pennsylvania, U.S. PBS's operations are
located in the Northern Appalachian Coal Fields, situated between Severstal's
North American production centres, and have the capacity to produce over
4 million tonnes of metallurgical coal.
PBS's portfolio includes six underground and six surface mining
operations. In the fiscal year ended March 31, 2008, PBS produced
approximately 2.4 million clean tonnes of coal, including 1.5 million clean
tonnes of coking coal. PBS has 133.5 million tonnes of in-place coal reserves
and 228.3 million tonnes of in-place coal resources. In addition to its
significant reserves, PBS has an experienced management team and a competitive
cost position among international coal producers.
Through its acquisition of PBS, Severstal expects to create value for its
shareholders through benefits from the vertical integration of its upstream
operations; the increase in self-sufficiency with regard to the supply of
primary raw materials available to its North American operations will allow
Severstal to control its operating costs. PBS's central location will also
mitigate transportation costs between Severstal's facilities.
About Severstal Resources:
Severstal Resources is a leading feedstock supplier in Russia to the
iron-and-steel industry which manages the mining assets of Severstal.
Severstal Resources incorporates the Karelsky Okatysh and Olcon iron ore
complexes and Vorkutaugol, a coal mining complex. Stalmag, a niobium
production facility is also part of Severstal Resources. In 2007, these
operations produced 7.6 million tonnes of coking-coal, 1.8 million tonnes of
steam coal, 10 million tonnes of iron-ore pellets and 4.7 million tonnes of
iron-ore concentrate. In 2007, Severstal Resources established a gold business
segment, which totalled 5.3 tonnes of gold output over the past year.
In May, 2008 Severstal Resources reached an agreement to purchase up to a
61.5% stake in African Iron Ore Group Ltd, which owns the exploration rights
for an iron ore deposit in the Putu Range area of Liberia, West Africa.
OAO Severstal is an international steel producer with a listing on the
Russian Trading System and the London Stock Exchange. Incorporated in 1993,
the company focuses on high value added and unique niche products and has a
successful track record of acquiring and integrating high-quality assets in
North America and Europe. Severstal owns mining assets in Russia, thus
securing its supplies of raw materials. In 2007, Severstal produced
17.5 million tonnes of steel with revenues of US$15.2 billion, EBITDA of
US$3.7 billion and earnings per share of US$1.92.
Forward Looking Statements:
This communication may contain projections and other forward-looking
statements regarding future events or the future financial performance of OAO
Severstal (Severstal). Forward looking statements are identified by terms such
as "expect," "believe," "anticipate," "estimate," "intend," "will," "could,"
"may" or "might", the negative of such terms, or other similar expressions.
Severstal wishes to caution you that these statements are only predictions and
that actual events or results may differ materially. Severstal does not intend
to update these statements to reflect events and circumstances occurring after
the date hereof or to reflect the occurrence of unanticipated events. Factors
that could cause the actual results to differ materially from those contained
in projections or forward-looking statements of Severstal may include, among
others, general economic conditions in the markets in which Severstal
operates, the competitive environment in, and risks associated with operating
in, such markets, market change in the steel and mining industries, as well as
many other risks affecting Severstal and its operations.
For further information:
For further information: For SeverStal: Dmitry Druzhinin, Investor
Relations, Olga Antonova, Public Relations, +7 495 926 7766 or Taylor Rafferty
for Severstal: Michael Henson, (212) 889-4350 (o), (917) 902-0767 (m); John
Dudzinsky, (212) 889-4350 (o), (646) 715-2980 (m)