Metalloinvest to sell rail business to Globaltrans
RUSSIA: An agreement for private rail freight company Globaltrans to buy the Metalloinvesttrans rail activities of iron ore producer Metalloinvest for US$540m was announced on April 27. The transaction will be financed from Globaltrans' own funds and credit facilities, and subject to regulatory approvals is expected to close at the end of May.
MIT handled 44·2 million tonnes in 2011, primarily metallurgical traffic, with adjusted revenue of US$344m and EBITDA of US$140m. As of December 31 2011 it had a fleet of 9 202 wagons, of which it owned 8 256. The acquisition includes an agreement for Globaltrans to handle all Metalloinvest's rail traffic in the first year, and have first refusal on 60% of its requirements during the following two years.
'It is increasingly important to have the scale and resources to maximise efficiency and profitability, and be able to meet the needs of large cargo owners', said Globaltrans CEO Sergey Maltsev. 'We have made it clear that we are looking to capitalise on market opportunities such as MIT, which is a high-quality business that, combined with the service contract with Metalloinvest, provides a low-risk path to grow our business and consolidate our position in the market.'