ENERGO: Russian metals major Evraz cancels coal demerger plans

Russian metals and mining major Evraz has announced on the London Stock Exchange (LSE) that it is cancelling its coal demerger plans and the extraction of Raspadskaya coal-mining assets due to Western sanctions against Russian military invasion of Ukraine.

“The execution of the transaction became technically impossible and the decision has been taken not to proceed with the demerger,” Evraz commented.

Evraz is not sanctioned directly, but one of its main shareholders, Roman Abramovich, was sanctioned as part of the unprecedented sanction pressure on Russia. The company previously narrowly avoided a default on its eurobonds and is shares were suspended from trading on the LSE.

As followed by bne IntelliNews, in 2011 Evraz's board had given its approval to considering the demerger of its coal business, while planning to boost its iron ore self-sufficiency. More broadly, as suggested by bne IntelliNews, the sanctions could further contribute to wrecking the nascent Russian state green agenda.

The decision to cancel the demerger plans is a logical step in the current economic situation, Aton Equity commented, expecting Raspadskaya to be reintegrated into the Evraz Group.

To remind, previously the extracted Raspadskaya had been expected to become one of the most attractive shares on the Russian equity market. Previously the board of the coal miner had already cancelled the final 2021 dividend.