Головна сторінка
/
Новини
/

Metinvest might lease, acquire flat re-roller in Poland

Metinvest might lease, acquire flat re-roller in Poland

9 September 2019

Ukraine’s largest steel producer Metinvest (METINV)
might lease and eventually acquire Huta Czestochowa, a producer of thick plates
in Poland, according to our analysis of a Sept. 7 news report by
Interfax-Ukraine, which cited Huta’s two press releases dated Sept. 6 and Sept.
7.

 

Huta currently belongs to Industrial Union of Donbas
(IUD), a Ukrainian steel holding. The company’s press releases said that Huta
was declared bankrupt by a local court on Sept. 4. The judge directed the
plant’s trustee to take action to lease the plant to an entity that would
guarantee starting production. The deadline for lease proposals was Sept. 6,
with a court hearing scheduled for Sept. 9 to hear detailed proposals from
potential lessees, the press releases said.

 

It would take about a month and PLN 60-80 mln (USD
15-20 mln) to resume production at the plant, the press releases said, adding
that the plant’s value without current assets and CO2 emission rights amounted
to PLN 188 mln (USD 48 mln), and PLN 230 mln (USD 59 mln) if some current
assets other than raw materials and scrap (mostly spare parts) are added.

 

Metinvest will be the most acceptable partner for
Huta, according to Konstantin Litvinov, board chairman of ISD Polska, IUD’s
Polish arm, as cited by Interfax-Ukraine.

 

Dmytro Khoroshun: Leasing and
eventually acquiring a European flat steel re-roller will be a very logical
M&A move for Metinvest as we outlined in our May 14 report on Ukrainian
fixed income. Metinvest sold 1.32 mmt of slabs to third parties in 2018, which
more than covers the 1 mmt per year capacity of Huta’s flat re-rolling mill
3600 cited in the media.

 

If Metinvest expands steel production at its Ukrainian
plants by 3 mmt, as the holding reportedly plans to do in the next several
years, it is likely to further expand the volume of slabs it would be able to
supply to re-rollers in regions protected by trade barriers, first and foremost
the EU.

 

In the past, Huta relied on slab supplies from
Alchevsk Steel, a Ukrainian IUD steelmaker located on territories currently not
controlled by Ukraine’s government. After control over Alchevsk Steel was lost
due to the war in Donbas, Huta reportedly resumed slab production using own
electric-arc furnace capacities (0.5-0.6 mmt of steel per year), but currently
the plant is completely idle.

 

We think that Huta’s value to Metinvest is its
re-rolling capacities, and that Huta is unlikely to resume own steelmaking
operations if it comes under Metinvest’s control.

 

We estimate the enterprise value of a 1 mmt per year flat
re-roller might be as high as USD 300-600 mln. We think that the USD 48-59 mln
value cited by Huta is an estimate for the value of the plant’s equity without
its debt. The amounts of Huta’s debt and other financial obligations remain
unknown.

 

We maintain our bullish view on METINV bonds.

Останні новини

News

23

02/2022

Separatists may claim entire territories of two Ukrainian regions

Russia has recognized “all fundamental documents” of the self-proclaimed Donetsk and Luhansk People’s Republics (DNR...

News

23

02/2022

U.K. to provide USD 500 mln loan guarantee for Ukraine as IMF mission starts

The British government is going to provide up to USD 500 mln in loan guarantees...

News

23

02/2022

MinFin bond auction receipts jump to UAH 3.5 bln

Ukraine’s Finance Ministry raised UAH 3.3 bln and EUR 7.2 mln (the total equivalent of...