Erdenet share selling “largest transaction in history of Rostec”

Economy
en_amarsaikhan@montsame.mn
2016-07-01 15:42:23

Ulaanbaatar /MONTSAME/ State Corporation Rostec sells the 49% stake in joint ventures Erdenet and Mongolrostsvetmet эү the Mongolian side, said the business development manager of Rostec.

The transaction value was not specified, but the manager calls the amount "the largest in the history of Rostec one-time receipt of funds."

Earlier, Bloomberg reported that Rostec can get $ 500 million for Mongolian assets.

"The deal was done on mutually beneficial market conditions both for Russian and Mongolian parts. Cost of sales of 49% package of shares for the purpose of the transaction is estimated at a premium to the market, taking into account the quality of the assets and their inherent development potential. Terms of the agreement were rated by independent international auditors and consultants ".

For Rostec decision to monetize a 49% stake in the joint Russian-Mongolian mining enterprises was adopted on the basis of a set of measures to increase the shareholder value of companies, as well as the funding needs to implement a number of strategies in the development projects of the corporation until 2025, said the statement.

Rostec implemented a comprehensive action plan for the management of enterprises, the anti-crisis program to reduce costs and increase production efficiency, optimize administrative costs and led the corporate governance standards in line with international standards. This set up has created additional value of the asset, and allowed to make a deal on favorable for the Russian and Mongolian side conditions stated in the Business Development of PT.

Erdenet in Mongolia is the largest producer of copper raw materials. The raw material base of the enterprise is the Erdenet ore-bearing area, which includes several fields. Currently operated by Northwest portion of approved reserves amount to about 6 million tons of copper and 170 thousand tons of molybdenum.
Mongolrostsvetmet supplies in Russia fluorspar concentrate for the aluminum and chemical industries, as well as iron and steel.