Evraz Nakhodka Trade Sea Port, one of the largest stevedoring companies in the Far East of Russia, is being fully purchased for a total of US$354.4 million by investment company and majority shareholder Lanebrook Limited.
Evraz, a vertically integrated steel, mining and vanadium business, will sell its shares and use $295 million of net proceeds from the deal to reduce the company’s debts after suffering from declining profits after fluctuations in steel prices.
The agreement has also secured transhipment services of coal and metals in specified volumes and tariffs provided by the Nakhodka Port to Evraz for the next five years.
Nakhodka Port is located on the Eastern section of Peter the Great Gulf, in Nakhodka Bay and is connected to all points of the Eurasian continent and the Trans-Siberian Railway.
It assists in the flow of goods between Asia and Europe with a daily capacity to unload up to 500 rail wagons.
In the year ended 31 December 2016, the port handled approximately 10 million tons of cargo and had gross assets of $50.3 million and net income of $44.5 million.
Sir Michael Peat, Senior Independent Non-Executive Director of Evraz, said: “The independent directors of Evraz unanimously believe the strategic rationale for the disposal of the Nakhodka Port is compelling, allowing for the realisation of value for the port now, whilst at the same time securing transhipment capacity for the company for the next five years.
“The independent directors believe this transaction will be financially beneficial to EVRAZ, enabling the company to continue making further progress with its focus on reducing indebtedness.”