Mechel raises bet on metallurgical industry with fourth plant

Russians at Mechel announced they had taken over control of metallurgical plant Laminorul Braila (LMRU), through the acquisition of its majority shareholder, Donau Commodities, in an around 9.4 million-euro transaction. Austrians at Donau Commodities had previously held 90.9% of Laminorul Braila. This is the fourth metallurgy plant held by Mechel in Romania, alongside those in Targoviste, Campia Turzii, and Buzau, Ductil Steel, the latter being acquired by the Russians in early 2008 in a 142 million-euro transaction. “The acquisition of Laminorul Braila is a new step in Mechel’s development strategy, whose main target is to increase the share of products with high margins in the group’s portfolio,” said Victor Dislevic, general manager of Mechel’s Eastern European steel division. In 2009 the turnover of Laminorul Braila fell almost five times in the context of the crisis, to 33.9 million RON (8.3 million euros), and the company’s losses doubled, to 39.1 million RON (9.6 million euros). Laminorul Braila shares were last traded at 0.34 RON/share, which values the company at 16.4 million RON (4 million euros).