Evraz Plc Amendment of transshipment agreement (6062L)
December 27 2018 - 10:42AM
UK Regulatory
TIDMEVR
RNS Number : 6062L
Evraz Plc
27 December 2018
AMENDMENT OF TRANSSHIPMENT AGREEMENT WITH NAKHODKA TRADE SEA
PORT
EVRAZ plc ("EVRAZ", the "Company" and together with its
subsidiaries, the "Group") announces today that it has signed a
Deed of Amendment ("Transaction") in relation to the Long-Term
Transshipment Agreement ("LTA") which was signed as part of the
disposal of Joint Stock Company EVRAZ Nakhodka Trade Sea Port (the
"Nakhodka Port") to EVRAZ' majority shareholder Lanebrook Limited
("Lanebrook") on 3 May 2017 and which was approved by the
independent shareholders of the Company on 23 May 2017.
Key Commercial Highlights
The LTA granted EVRAZ with the tolerance level of 200,000 tonnes
of volume per annum over the life of the contract, without being
exposed to the "take-or-pay" clause envisaged by the minimum
guaranteed volumes.
In addition to the current tolerance of 200,000 tonnes per annum
EVRAZ and the Nakhodka Port have agreed on additional tolerance for
steel products that grant EVRAZ additional flexibility under the
take-or-pay exposure
In addition, the parties agreed to fix the maximum volume for
the Nakhodka Port to transship additional volumes of coal shipped
in excess of the minimum volumes and annual tolerance levels as
described above at current market rates.
The Transaction will allow EVRAZ: (i) to mitigate its
take-or-pay risks in relation to the LTA and (ii) to get a
possibility to transship additional volumes of Coal in a strategic
pathway of Far East at attractive rates
As announced on 4 September 2018, Lanebrook distributed all the
shares it held in the Company to its direct shareholders (Crosland
Global Limited and Greenleas International Holdings Ltd) in
proportion to their holdings in Lanebrook who continue to wholly
own Nakhodka Port.
Pursuant to UK Listing Authority ("UKLA") Listing Rule 11.1.4R,
Nakhodka Port is classified as a related party of EVRAZ, due to its
direct shareholders also being substantial shareholders in the
Company. The Transaction, therefore, constitutes a smaller related
party transaction as defined under UKLA Listing Rule 11.1.10R and
EVRAZ has accordingly obtained a written confirmation from a
sponsor that the terms of the transaction are fair and reasonable
as far as shareholders of EVRAZ are concerned.
Background
As part of the Nakhodka Port disposal to Lanebrook in 2017, East
Metals AG, a fully owned subsidiary of the Company ("EMAG"),
entered into a LTA with the Nakhodka Port. EMAG took the obligation
to ship certain volumes of coal and steel products through the
Nakhodka Port for five years at fixed rates, secured by a
"take-or-pay" clause. Further details of the LTA can be found in
the Shareholder Circular which is available on EVRAZ's website
www.evraz.com/investors/information/general_meeting/
For further information:
Media Relations:
London: +44 207 832 8998
Moscow: +7 495 937 6871
media@evraz.com
Investor Relations:
London: +44 207 832 8990
Moscow: +7 495 232 1370
ir@evraz.com
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END
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