On December 30, 2016, the Chairman of the Board of Directors of Evraz, Alexander Abramov, and its CEO sold 0.23 and 0.11% of shares, respectively, the company said. Partners sold the shares at 220.89 pence per share, 0.4% below market value on December 30, thus earning a total of 10.7 million pounds, or $13.2 million (at the exchange rate on the date of transaction). Now Frolov's effective share in Evraz through Lanebrook Ltd. is 10.7%, while Abramov's is 21.4%, as disclosed on the company website.
The report does not say who bought these shares, and a representative of Evraz declined to comment. Shares may be sold in the market, according to a trader and two investment bankers. Nothing is known about changes in the shares of other shareholders of the company, as follows from Evraz site.
Abramov and Frolov sold Evraz 484,653 totally, said in a disclosure. According to Bloomberg, the entire daily turnover on the stock exchange on December 30 was 447,000 shares. The surge in trading activity of Evraz shares fell on December 16, 2016, when 8.4 million shares passed through an open merket, and the company's capitalization per day decreased by 20% to $3.75 billion. At the close of trading on Friday the capitalization of Evraz was even lower: $3.74 billion.
The last time Abramov and Frolov sold shares in 2014: in November they sold 0.026 and 0.013% respectively. Prior to this, the share of the major shareholders of Evraz declined after the redemption of shares of Alexander Vagin and Gennady Kozovoy in Cyprus Corber Enterprises Limited, which controls Raspadskaya; partly the asset was paid for with metallurgical holding shares. Also in 2013, Abramov and Frolov sold 0.01 and 0.02%, respectively. By 2015, the share of Evraz shareholders declined: 30.8% by Abramovich, 21.43% by Abramov and 10.7% by Frolov. But in October of that year Lanebrook increased its share in the company by more than 1%, and the proportion of shareholders increased proportionally.
Mining and Metallurgical Company
Major owners: Roman Abramovich (31.03%), Alexander Abramov (21.38%), Alexander Frolov (10.68%), Gennady Kozovoy (5.90%), Alexander Vagin (5.84%), Yevgeny Shvidler (3.09%).
Capitalization: $3.74 billion.
Revenue (IFRS, the first half of 2016): $3.54 billion.
Profit: $7 million.
Now the time for selling was chosen wisely, is the consensus of the Aton analyst Andrey Lobazov and director of ACRA corporate ratings Maxim Khudalov. "The main driver of capitalization of Evraz in the last year was the rally in coking coal prices (it rose by more than 3 times in the last four months of 2016)," says Lobazov. Due to the growth of prices, Mechel, which continues to negotiate with creditors to refinance $1 billion of the $6.8 billion debt (444 billion rubles at the end of the Q3), saw its capitalization rose between August and December 2016 by 3 times, as follows from Bloomberg data. But a key factor in the growth of capitalization of Russian steelmakers with high integration in the coal segment has been exhausted, believes Khudalov. Coal has stopped growing and started downward correction (in December and January it fell by $100 per 1 ton), the expert said. The latter is associated with the restoration of the number of working days in the mines in China from 276 to 336 (a reduced number of working days in the mines was adopted in the summer of 2016), says Khudalov.
In mid-December, Vladimir Lisin, the owner of Novolipetsk Steel, managed to use this situation, too: his Fletcher Group Holdings Ltd. sold 1.5% of NLMK equity for $153.1 million (from the beginning of 2016, NLMK rose 2-fold to $10.8 billion). The selling made it possible for the company "kill two birds with one stone": it can now hope for the inclusion in the MSCI index, says Lobazov.