The Russian miner and steelmaker Evraz Group (Evraz) has announced that it has lost its option to raise its stake to 51 percent in Chinese flats producer Delong Holdings Limited (Delong), due to its failure to obtain China's anti-trust approval in time.
As SteelOrbis previously reported, on February 18 2008, Evraz concluded a share purchase agreement with Singapore-listed Best Decade Holdings Limited (Best Decade) to acquire from the latter up to a 51 percent stake in Delong over an agreed period of time. The agreement included three transactions: an initial sale to Evraz of an approximate 10 percent stake in Delong (Initial Sale), a call option and a put option, which would allow Evraz to increase its stake in Delong from 10 percent to 42.8 percent, as well as an acquisition of an additional 8.97 percent stake in Delong from Best Decade's beneficial shareholders.
The agreement was subject to antitrust clearance by China's Ministry of Commence and State Administration of Industry and Commerce. However, the clearance, which was the necessary condition of the agreement, has not been obtained until the agreed deadline, August 18 2009. "The call option and the put option under the agreement have lapsed and cease to have any further effect," reads the company's statement.
According to the company's release, "Evraz remains interested in developing its business in China and continues to consider various business opportunities".