IUD considers merger of Alchevsk Steel and Alchevsk Coke

The Industrial Union of Donbass, the parent company of Alchevsk Iron & Steel (ALMK UK) and Alchevsk Coke (ALKZ UK), is considering merging both enterprises, the steel maker’s CEO said yesterday (via Interfax).

Roman Topolyuk: The mechanics of the merger have yet to be revealed, thus the potential impact on the stocks is uncertain, though the risk of massive dilution threatens Alchevsk Iron & Steel. In the case of Alchevsk Coke, on the other hand, it could be speculative opportunity for minorities: its shares are trading at UAH 0.189 (USD 0.02), 1.32x below their nominal value (UAH 0.25). If a merger decision appears on its AGM agenda, Alchevsk Coke shareholders who vote against the merger should get an offer from the company to buy back their shares at a price no less than the nominal value, according to a decree from Ukraine’s Securities and Exchange Commission.