At the beginning of the year, EVRAZ plc announced it was considering the potential demerger of its metallurgical coal assets consolidated under PJSC Raspadskaya. After a comprehensive review, the EVRAZ board and its management team concluded that the separation of the two businesses serves the long-term interests of the company’s shareholders, employees, clients and other stakeholders.
EVRAZ is a vertically integrated steel producer with assets in Canada, the Czech Republic, Kazakhstan, Russia, Switzerland and the U.S. The company’s Raspadskaya Coal Co. consists of three regional divisions: Novokutznesk, Mezhdurechensk and Mezhegeyugol.
The Novokuznetsk region has five longwall mines and two prep plants. The Mezhdurechensk division comprises the Raspadskaya and Raspadskaya-Koksovaya mines, and the Raspadskaya prep plant. The Mezhegeyugol facility, located in the center of Tyva in East Siberia, mines Zh-grade coal, a “fat coal that is in short supply in the Russian coal market.”
The demerger will be effected by EVRAZ making an interim in specie distribution of the shares it directly holds in the Raspadskaya Group (RASP), which is listed on the Moscow Exchange, to EVRAZ shareholders. EVRAZ shareholders are expected to receive an entitlement to 0.4255477880 of a RASP share for each EVRAZ share.
EVRAZ shareholders, who currently have an indirect interest in the RASP Group through their holding of EVRAZ shares, will have the opportunity to receive RASP shares and hold a direct interest in the RASP Group.
EVRAZ and RASP will operate as separate, independent companies following the demerger. RASP provides approximately 70% of EVRAZ’s metallurgical coal supply requirements needed to support its operations. To aid the transition certain trading arrangements, including two new, long-term coal offtake agreements, where RASP will provide EVRAZ with up to approximately 60% of the post-demerger EVRAZ Group’s coal requirements for steel production, will continue until December 31, 2026. East Metals AG, the trading subsidiary of the EVRAZ Group, will continue to resell coal purchased from the RASP Group for up to 15 months following the demerger. RASP will become a related party of EVRAZ following the demerger.
