Russian mining company Mechel OAO (MTL) announced the sale of a 28% share in Vanino Sea Trade Port OAO's equity capital, retaining only a small stake for itself. Mechel Group, as represented by its unit Mecheltrans OOO, sold the stake to an outside investor for RUB5.04 billion (roughly $158.43 million).
In Jan 2013, Mecheltrans OOO acquired the stake in Vanino Sea Trade Port from one of the port’s minor shareholders – a subsidiary of En+. The transaction was funded by the investor who financed the acquisition of Port Vanino’s controlling stake and thus had no impact on Mechel Group’s leverage.
Mechel stated that the investors are not interested in transhipping their products through Port Vanino, which will enable it to use the port’s entire capacity for their own interests. One of the largest ports in Russia, Port Vanino’s favorable location will support Mechel’s expansion into the Asia Pacific region. The port is also open for navigation throughout the year and is the largest transport hub in the Khabarovsk Region.
According to Mechel, Port Vanino’s coal transhipment capacity can be increased to 7 million tons in 2013 without incurring any significant costs. This also saves Mechel from building its own storage terminal at Vanino for the next 3-5 years. By utilizing the facilites of the port, Mechel can expand its customer base.
Mechel currently retains a short-term Zacks Rank #4 (Sell).
Other companies in the steel industry with favorable Zacks Rank are Companhia Siderurgica Nacional (SID), Shiloh Industries Inc. (SHLO) and Gerdau S.A. (GGB). While both Companhia Siderurgica and Shiloh Industries hold a Zacks Rank #1 (Strong Buy), Gerdau retains a Zacks Rank #2 (Buy).
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