Russian mining company
) announced that it has sold 100% shares of UK-based steel plant
Invicta Merchant Bar to Helium Miracle 127 LLP for 1.1 million
pound sterling ($1.7 million). The buyer Helium Miracle 127 LLP
also assumed the plant's debt to Mechel OAO.
Invicta Merchant Bar produced round, square and strip long
rolls of various steels and the plant was sold as a part of
Mechel's strategy to divest those assets that do not add value to
the company's stakeholders. It was also due to the challenging
conditions in Europe's steel industry that triggered the
company's decision to sell off the plant. Mechel expects the sale
to improve its operational cash flow and encourage
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
Mechel owns and controls essential infrastructure, including
ports, rolling stock and power plants, which provide access to
the export markets. However, Mechel could be jeopardized because
of its high debt and interest burden, and might not be able to
keep up with its huge capital spending program.
Mechel posted a loss in the first quarter of 2013, reported on
Jun 18, hurt by the sale of its Romanian steelmaking assets.
Revenues dropped by double digits with declines across the board.
Sustained weakness was seen in the core mining segment. Mechel
announced its decision to buy back shares.
Mechel currently retains a short-term Zacks Rank #4
Other companies in the steel industry with favorable Zacks
Kobe Steel Ltd.
Shiloh Industries Inc.
Nippon Steel & Sumitomo Metal Corporation
). All of them hold Zacks Rank #1 (Strong Buy).
KOBE STEEL-ADR (KBSTY): Get Free Report
MECHEL OAO ADS (MTL): Free Stock Analysis
NIPPON STEEL CP (NSSMY): Get Free Report
SHILOH INDS INC (SHLO): Get Free Report
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