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Arcelor Mittal Excluded from Auction
The state-owned shares in Yakutugol and Elgaugol coal companies were sold to Mechel for $2.3 billion, 22 percent over the starting price of the bidding. Arcelor Mittal was not allowed into the auction by the auction commission. No explanation was given for that decision, although the commission promised to explain it to Arcelor Mittal in writing. Analysts say that the price was high for the stakes, but Japanese and Korean companies are prepared to buy 40 percent in the companies.
At the auction, which took place in Moscow, 68.86 percent of Elgaugol and 75 percent minus one stock of Yakutugol were sold. Mechel Invest, Kolorprofil (representing Arcelor Mittal) and the Yakutia Coal Co. (representing ALROSA) filed applications to take part in the auction, where Mechel and Arcelor Mittal were expected to compete hard for the shares. Arcelor Mittal tried to reach an agreement to united forces with ALROSA, but those attempts failed. A source told Kommersant that the Arcelor Mittal application was riddled with technical errors. A representative of that company was present at the auction.
Mechel is expected to increase the efficiency and production of the companies and may sell shares in them to the Japanese Sumimoto and Soji companies and Korean LG Group. The price of coking coal is expected to rise from its current $95 per ton to $130 per ton next year.
www.kommersant.com
All the Article in Russian as of Oct. 08, 2007
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