Cleary Gottlieb was U.S., English and Russian counsel to Evraz Group S.A. in its $422 million IPO on the London Stock Exchange, and Rule 144A offering in the United States of 29.1 million GDRs (representing 8.3% of Evraz’s issued share capital). The lead managers, Morgan Stanley & Co. International Limited, Credit Suisse First Boston (Europe) Limited and Renaissance Securities (Cyprus) Limited, have an over-allotment option for an additional 4,365,000 GDRs (1.2% of issued share capital) exercisable at the IPO price. The IPO is the first on the London Stock Exchange by a company that owns assets primarily in the Russian metallurgical and mining sector.
Evraz Group S.A. is the Luxembourg holding company for one of the largest vertically-integrated steel and mining businesses with operations mainly in the Russian Federation. Evraz ranked first in crude steel production in Russia in 2004 (13.7 million tons), is the largest producer of long products in Russia and is among the fifteen largest steel producers in the world. Following an acquisition in 2005, Evraz is also the second-largest producer of iron ore in Russia. Evraz will use the proceeds of the offering to pursue the acquisition and development of additional mining assets and downstream steel operations both within and outside of Russia, to consolidate Evraz’s ownership interests in existing assets and to modernize and improve operations at Evraz’s existing production facilities.
Prior to the IPO, Cleary Gottlieb represented Evraz in its corporate restructuring and related corporate governance matters and in the acquisition of an additional interest in one of Evraz’s three steel plants for $215 million. The acquisition agreement for this interest provides that following the IPO, some or all of the consideration may be paid in shares in Evraz Group S.A. at either the purchaser or seller’s option. Cleary Gottlieb is also currently representing Evraz in litigation pending before the United States District Court for the District of Delaware and Delaware Chancery Court arising from the bankruptcy and sale of one of Evraz’s major iron ore mining and processing facilities prior to its acquisition by Evraz.
Evraz is the second steel company operating primarily in Russia to conduct an IPO. In the first such IPO, Cleary Gottlieb represented the underwriters (led by UBS) in the November 2004 issuance of ADSs listed on the New York Stock Exchange by OAO Mechel Steel Group.