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Azovstal EGM approves 0.23% SF increase: NEUTRAL
At a July 04 EGM, shareholders of Azovstal [AZST UZ, BUY] approved a statutory fund increase plan.
A total of 9.704 mln new shares will be offered at face value (UAH 0.25, or USD 0.0543 at USD/UAH 4.600) to existing shareholders only. The number of shares outstanding will increase by only 0.23%, to 4.204 bln. The increase in the statutory fund will thus amount to USD 0.53 mln. According to Azovstal’s press service, the offering will be divided into two stages: September 15 – October 06 and October 07 – October 10. The ex-rights date will be September 15.
Azovstal is the third-largest Ukrainian steelmaker and a member of the Metinvest Group. In 2007, the company smelted 6.33 mln mt of steel, achieving a net sales of USD 3.243 bln, EBITDA of USD 631 mln, and a net income of USD 420 mln. MetInvest Group is an assembly of the metallurgical and mining assets belonging to Rinat Akhmetov, which is strategically directed by Metinvest Holding LLC. Vadim Novinskiy and his Smart Holding also have a 25%+1 stake in Metinvest Group business.
Our view:
NEUTRAL. Investors should participate in the offering.
Ivano-Frankiskcement opened new cement plant: POSITIVE
Ivano-Frankivskcement [IVFC, U/R] has opened a new cement plant with an installed capacity of 1.2 mln tons per year. The new plant will use the dry method in the production process, as well as different fuel types. Near 30% of the fuels utilized will be alternative.
Our view:
IVFC’s cement production capacity was 160 thsd tons per year before opening the new cement plant. IVFC’s sales could come under pressure with its regional competitors, which include Podilcement (production capacity of 3.7 mln tons of cement a year), Mykolayivcement (at 3.1 mln tons per year) and Volyn-Cement (at 2 mln tons per year). Launching the new cement plant will multiple the upward grow of IVFC’s net sales and positively impact on its margins.
Mostobud started Olympic Stadium reconstruction: POSITIVE
Mostobud [MTBD, BUY] began the reconstruction of the Olympic Stadium, the main event venue for Euro 2012 in Ukraine. The renovation process has commenced even before approval of the designer in charge of the reconstruction project, because designer’s proposals entail that the existing buildings are to be taken apart.
Mostobud’s current aim is to disassemble the stadium’s layers and structures. Mostobud is expected to finish the dismantling process in 50 days and to involve near 300 workers in the operation.
The budget for the Olympic Stadium’s reconstruction totals USD 300 mln.
Our view:
In 1966-67, Mostobud took part in the Olympic Stadium’s original construction. The company holds the architectural plans for the stadium. We suggest that MTBD is capable of not only wrecking the stadium, but also reconstructing it.
According to our estimates, preparation for Euro 2012 will enhance Mostobud’s order volume USD 3.4 bln over the next five years. The Olympic Stadium’s reconstruction project will additionally increase Mostobud’s net sales and net margin, since this project is more profitable than those in the sphere of bridge construction.
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