) has acquired a controlling stake in Vanino Sea Trade Port OAO
for about RUB15.5 billion ($512.5 million). The takeover is in
sync with the company's efforts to expand its export capacities
in Asia Pacific.
The Government of the Russian Federation, in December 2012,
issued a decree related to the sale of federally owned shares of
Vanino Sea Trade Port OAO and Mechel was declared the buyer. The
company purchased 55% of share capital (or 73.33% of common
shares) of Vanino.
Port Vanino is one of Russia's ten largest ports and is suitably
located for Mechel for providing deliveries to the Asia Pacific
region. The port is also open to navigation throughout the year
and is the largest transport hub in the Khabarovsk Region. Port
Vanino can process vessels up to 45,000 tons deadweight and has
64 cranes of 6 to 100 ton hoisting capacity.
With access to the port's transhipment capacities, Mechel can
increase its exports given the port's greater storage capacity.
According to Mechel, Port Vanino's coal transhipment capacity can
be increased to 7 million tons in 2013 without incurring any
significant costs. This also saves Mechel from building its own
storage terminal at Vanino for the next 3-5 years. By utilizing
the capacities of the port, Mechel can increase its customer
Mechel is a leading domestic steel and coal producer with a
strong position in key businesses, including production of
specialty steel and alloys. The company has the largest coal
reserve base in Russia and is mainly focusing on growth and
Last month, the company released its third-quarter 2012
results. It posted consolidated net income of $54.9 million in
the quarter compared with a net income of $25.7 million in the
year-ago quarter, representing a roughly 114% increase. Revenues
for the quarter came in at roughly $2.71 billion, down 15.4% from
$3.21 billion in the year-ago period.
Mechel competes with
), among others. The company retains a short-term Zacks Rank #3
(Hold). We currently have a long-term (more than 6 months)
Neutral recommendation on its shares.
ARCELOR MITTAL (MT): Free Stock Analysis
MECHEL OAO ADS (MTL): Free Stock Analysis
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