The Russian state corporation bank for development and foreign economic affairs Vnesheconombank (VEB) has announced that it has concluded a preliminary agreement for the acquisition of 100 percent ownership of Amurmetall, Russia's only steel producer in the Far East region.
The agreement in question was signed during the meeting held today in Khabarovsk city on development in Russia's Far-Eastern Federal District - a meeting which was attended by Russian Prime Minister Vladimir Putin.
"The 100 percent stake becomes the property of VEB. But we do not consider this as nationalization. On the contrary, the owners have the possibility and right to buy back this stake from VEB in the event of a favorable development of the situation and of an efficient work performance," Mr. Putin stated.
As SteelOrbis previous reported, VEB is also considering opening a Ruble 5 billion (approx. $159.79 million) credit facility for Amurmetall. The acquisition of 100 percent of Amurmetall, as well as the opening of the credit facility, will be carried out by VEB within the framework of the implementation of the project for finalizing Amurmetall's investment program and for the recovery of the company's financial stability.
The project will allow Amurmetall to increase its annual production capacities from one million mt to 2.1 million mt, to ensure profitable operation of the plant, and to keep jobs in the Khabarovsk region.