Evraz Plc Amendment of transshipment agreement (2781Y)
31 Dicembre 2019 - 11:00AM
UK Regulatory
TIDMEVR
RNS Number : 2781Y
Evraz Plc
31 December 2019
AMENDMENT TO THE TRANSSHIPMENT AGREEMENT WITH NAKHODKA TRADE SEA
PORT
EVRAZ plc ("EVRAZ", the "Company" and together with its
subsidiaries, the "Group") announces today that it has signed a
Deed of Amendment ("Transaction") in relation to the Long-Term
Transshipment Agreement ("LTA") between East Metals AG (the
"EMAG"), a fully owned subsidiary of the Company and Nakhodka Trade
Sea Port (the "Nakhodka Port") previously concluded as a part of
the disposal of Nakhodka Port in May 2017.
In the Transaction, parties have agreed:
1. to decrease rates for excess volumes of transshipped coal for 2020,
2. to approve new rates for transshipment of steel products
(including fumigation cost of dunnage for steel products).
Key Commercial Highlights
1. The parties have determined and agreed on a new lower rate
for excess volumes of transshipped coal.
TERM 2019 2020
Rates for transshipment of US$19.0 /per metric US$15.0 /per
excess volumes of coal (exceeding t metric t
agreed quotas)
-------------------- -------------
New rates are comparable with the rates set by the Nakhodka Port
for the third parties. This will allow EVRAZ to transship
additional volumes of coal to the Far East at a lower cost. The cap
for excess coal volume has not changed and remains at approximately
2.7 million metric tonnes.
2. EMAG requested additional services from Nakhodka Port regarding the use of wooden dunnage for transshipment of steel products corresponding to the ISPM 15 standard. Thus the parties have agreed to increase by US$1.7 the rates for transshipment of steel products (such were disclosed in the LTA published in May 2017).
Pursuant to UK Listing Authority ("UKLA") Listing Rule 11.1.4R,
Nakhodka Port is classified as a related party of EVRAZ, due to its
direct shareholders also being substantial shareholders in the
Company. The Transaction, therefore, constitutes a smaller related
party transaction as defined under UKLA Listing Rule 11.1.10R and
EVRAZ has accordingly obtained a written confirmation from a
sponsor that the terms of the transaction are fair and reasonable
as far as shareholders of EVRAZ are concerned.
Background
As part of the Nakhodka Port disposal to Lanebrook Limited
(EVRAZ' majority shareholder at the date of the disposal) on 3 May
2017 and which was approved by the independent shareholders of the
Company on 23 May 2017, EMAG, a fully owned subsidiary of the
Company, entered into a LTA with the Nakhodka Port. EMAG took the
obligation to ship certain volumes of coal and steel products
through the Nakhodka Port for five years at fixed rates, secured by
a "take-or-pay" clause. Further details of the LTA can be found in
the Shareholder Circular which is available on EVRAZ's website:
https://www.evraz.com/upload/iblock/225/2258b5961b467906b78c4ca5651c4664.pdf
On 27 December 2018, the Board of Directors approved the first
Deed of Amendment in relation to: (i) excess volume of coal and
(ii) rates for such excess volumes to be added to the Tariff; these
rates are subject to annual adjustment to be made by the parties
though bona fide negotiations.
On 16 August 2019, the Board of Directors approved the second
Deed of Amendment in relation to rates for transshipment of excess
volumes of coal (exceeding agreed quotas).
For further information:
Media Relations:
+7 495 937 6871
media@evraz.com
Investor Relations:
+7 495 232 1370
ir@evraz.com
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END
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