Severstal will keep control of all metals assets -- including the Cherepovets plant and its share in a joint venture with United Metals Cos. -- and will remain the central unit for the group. The non-metals businesses will be divided between Severstal-Auto and Severstal-Resource.
Severstal-Auto will own controlling stakes in the Ulyanovsk Auto Plant and the Zavolzhsk Engine Plant. Severstal-Resource will own controlling stakes in various mining companies.
The share structure of Severstal-Auto and Severstal-Resource will be identical to Severstal, a top Severstal manager, who declined to be identified, said Monday. Currently, company management controls some 80 percent of Severstal's shares, with Mordashov holding 16.63 percent, while 5 percent to 8 percent are traded on the stock market.
The group's controlling stakes in auto and mining companies are to be transferred to Severstal's balance sheet following approval by the Anti-Monopoly Ministry, and Severstal-Auto and Severstal-Resource will be fully owned subsidiaries.
Severstal's board of directors decided at the end of February to restructure non-core assets, one of the company's top managers, who wished to remain anonymous, said Monday.
Shareholders will decide at the next annual shareholders meeting whether to pay Severstal shareholders dividends in the form of shares in Severstal-Auto and Severstal-Resource. The date of the meeting has yet to be released.
The Severstal manager did not reveal the size of the charter capital of Severstal-Auto and Severstal-Resource, or the value of the businesses being restructured. He valued the group's turnover last year at about $2.5 billion.
Severstal finance and economics director Mikhail Noskov presented the restructuring scheme to analysts Monday.
This is the first time such a scheme has been applied in Russia, said Maxim Matveyev, an analyst at Alfa Bank. The creation of independent subsidiaries will increase the manageability of the group, he said. "At present, all assets are managed by a single company within which viewpoints can clash. By dividing up the business its manageability increases."
Investors will look upon the restructuring favorably, said Alexander Agibalov of the Aton brokerage. "Certain minority shareholders didn't know what acquisitions money was being spent on. Now they will receive shares in structures that will directly own auto and raw materials companies."
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