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Russia's Estar Holding to be sold to investor

Tuesday, 31 March 2009

Elektrostal Rossii (Estar) Group is about to get a new investor - Abukar Bekov, who is to ascend to the director's post within 30 days, according to Russia's Binbank.

The bank says it has received an instruction to restructure Estar's debts by finding an investor, as part of a consultancy agreement with the company signed at the beginning of March. A series of consultations and negotiations with creditors and the formation of a business plan aimed at reviving the group’s finances will take place in the next two weeks, the bank says.

Estar owes $1bn (€760.8m), Steel Business Briefing learns from the sources familiar with the company in Russia. Estar's representative could not be reached for comment by the time SBB went to press. Binbank says it is confident it will lead the troubled holding out of the situation in which it finds itself in an “optimally short time”.

Abukar Bekov used to be director of the trading arm of Russneft oil company. Estar Group comprises the Rostov, Guryevsk, Volga-FEST/Frolov, Kuzmin Novosibirsk, Zlatoust and Nytva steel plants, Steel Profile, Volgograd small diameter and Engels pipe plants, Trading House Estar, and scrap collector and processor Lomprom. The company mainly produces long products, special steels and pipe via the electric arc furnace route.

Estar's current owner, Vadim Varshavsky, also controls the former Istil long product plants in Ukraine and the UK, as well as the former Alphasteel mini-mill in Wales, UK, and a small Egyptian rebar mill. SBB understands only Russian assets will be included in the sale.

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