Severstal North America to sell four US steel plants to Aurora Resurgence
29 Apr 2010
Severstal North America, a part of Severstal OAO, Russia's largest steel producer, said yesterday that it has agreed to sell four of the service centres operating under its Northern Steel Group Inc unit, to Los Angeles-based private equity fund Aurora Resurgence for an undisclosed sum.
The agreement is for the sale of Miami Valley Steel Service located in Piqua in Ohio, Premier Resource Group based in Lombard in Illinois, Electric Coating Technology based in East Chicago in Indiana, and US Metals and Supply located in St Louis, Missouri.
Severstal had acquired these service centres that process steel into finished products in 2008 from Rouge Steel of Michigan, for about $775 million.
Chicago, Illinois-based Severstal North America had put these service centres up for sale in December 2009 and had reportedly received proposals from five groups, of which, two were short listed and were supposed to conduct due diligence in February.
"The sale of these Northern Steel Group businesses will allow us to more fully focus on our core strategy of building competitive and efficient steelmaking assets in the US," said Sergei Kuznetsov, CEO of Severstal North America.
Severstal North America would use net proceeds from the sale for general corporate purposes, Severstal North America said in a statement.