Izhevsk, Russia – April 27, 2005 – Mechel OAO (NYSE:MTL) announces the acquisition of a 90.36% stake in Kambarka Port OAO.
The stake was acquired for approximately $3.4 million. The acquisition was made to further diversify the cargo flow of our coal and steel products and to improve our logistics.
Since 2004, Port Kambarka OAO has been in bankruptcy proceedings. A bankruptcy settlement agreement is expected to be signed during the first half of 2005.
Port Kambarka is located in Kama, a town in the Republic of Udmurtia, and is one of Russia’s largest river ports. The facility specializes in the transshipment of bulk cargo, including ore, iron ore concentrate and coal. Due to its significant depth and favorable location near the Gorkov railway, the port is capable of processing “river-sea” class cargo ships, routing both within Russia and European countries, particularly Finland, Sweden, Norway, and Great Britain through the Baltic and North seas. In 2004, freight turnover was 207,000 tonnes.
Mechel Steel Group OAO
Mechel Steel Group is one of the leading Russian metals and mining companies. The Company unites producers of steel, rolled products, hardware, coal, iron ore concentrate, and nickel. Mechel Steel Group products are marketed domestically and internationally.
Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Mechel Steel Group, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. We do not intend to update these statements. We refer you to the documents Mechel Steel Group files from time to time with the U.S. Securities and Exchange Commission, including our Form F-1. These documents contain and identify important factors, including those contained in the section captioned “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in our Form F-1, that could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, the achievement of anticipated levels of profitability, growth, cost and synergy of our recent acquisitions, the impact of competitive pricing, the ability to obtain necessary regulatory approvals and licenses, the impact of developments in the Russian economic, political and legal environment, volatility in stock markets or in the price of our shares or ADRs, financial risk management and the impact of general business and global economic conditions.