Evraz sells subsidiary in the Czech Republic

Russia's largest steelmaker Evraz, after a year of efforts, closed a deal to sell its Czech loss-making Vitkovice Steel facility in Ostrava for $ 89 million to a group of private investors to help cut debt amid declining European demand for steel. Evraz announced back in April last year that it plans to sell the division, wishing to reduce its European operations.

The enterprise is transferred to a group of five investors Martinely Holdings, Nabara Holdings, Vitect Services, Hayston Investments and Dawnaly Investments in equal shares. Investors do not plan any significant changes in the company's activities or in the composition of management in the near future. They also took on the debt of the company in the amount of $ 198 million.

Evraz Vítkovice Steel is the third largest steel company in the Czech Republic with about 1,100 employees. However, due to weak demand, steel production stopped several times last year. "Investors are looking to improve EVS's economic performance through the positive effect of the ability to buy key raw materials from various independent suppliers," said a spokesman for the Jaromir metallurgical plant.

Analysts believe that the terms and conditions of the deal are very good for Evraz, and this will help the company reduce its debt. The company's shares are down 32 percent this year amid low product prices and following the conflict between Russia and Ukraine. In addition, the head of the Vitkovice Steel trade union in Ostrava, after the announcement of the agreement, commented: "The sale is definitely good news for us."