SCM Launches Its Metal & Mining Holding - Metinvest.

At the official presentation of Metinvest Holding on June 6, 2006, the holding’s CEO Igor Syryi disclosed the list of companies that will form Metinvest. The companies are grouped into three divisions each representing separate links in a vertically integrated chain. There is a Coal & Mining division (coal miner Karsnodonvugillya and Avdiyivka Coke plant), an Iron Ore division (Pivnichny GOK and Tsentralny GOK) and a Steel division (Azovstal (AZST: Suspended), Enakievo Iron & Steel, Metalen, Khartzysk Tube (HRTR: SELL), Feriera Valsider rolling plant and a trader Leman Commodities). Concorde Capital: While the legal structure of the holding is still being shaped, we believe the consolidation of SCM’s metal assets under one umbrella is a logical step toward its future IPO. Metinvest’s management did not mention any plans concerning the company going public, we believe this is likely to happen in the next two or three years. Metinvest is 80%-owned by SCM and 20%-owned by Metinvest B.V. registered in the Netherlands. Although Metinvest’s management expressed the company’s utmost commitment to transparency and adherence to western corporate governance standards, we question how they will treat minority shareholders.