Estar shareholder agrees to buy Istil

Varshavsky, who is also a State Duma deputy in Russia, has entered into the agreement in conjunction with international steel trading group Stemcor, which will be helping to arrange the relevant financing for the deal, a source close to the negotiations told MB.

Once the deal is completed Stemcor is likely to be responsible for the distribution of Istil’s products under the terms of an off-take agreement, the source added, going on to say that Stemcor has been working closely with Estar for some time.

IMH, which is owned by chairman Mohamed Zahoor, signed the agreement with Berycan, a company representing Varshavsky’s investment vehicle MirInvest and Stemcor, on January 21.

Russian financial group Alfa Bank has acted as consultant to Berycan on the deal, while investment bank Nomura advised Istil, according to the release.

Last week Estar Group denied reports that it was in negotiations with IMH for the acquisition of the Donetsk mill, while Istil executives, including Zahoor, have remained unavailable for comment since the reports first circulated.

Last year the Ukrainian mini-mill produced 1.2 million tonnes of carbon, alloy and special steels in 2007 after making investments in its scrap storage facilities, according to industry sources.