UK-listed Evraz abandons coal assets demerger after Russia sanctions

Logos of EVRAZ group are seen on buildings of Nizhny Tagil metallurgical combinate NTMK in in Nizhny Tagil
Logos of EVRAZ group are seen on buildings of Nizhny Tagil metallurgical combinate NTMK, in Nizhny Tagil, Russia November 21, 2021. REUTERS/Maxim Shemetov
  • Move follows temporary halt of separation in March
  • Top investor Abramovich sanctioned by the West
  • Says "technically impossible" to execute deal at this point
  • Evraz's London-listed shares remain suspended

April 1 (Reuters) - Russian steelmaker Evraz (EVRE.L), whose biggest shareholder is sanctioned billionaire Roman Abramovich, on Friday scrapped plans to separate its coal assets, citing sanctions on Moscow following its invasion of Ukraine.

The London-listed company said the sanctions made it "technically impossible" to execute the demerger it proposed early last year to concentrate on its core steel business.

The move comes after Evraz indefinitely suspended the demerger of the Russia-based assets, consolidated under Raspadskaya (RASP) (RASP.MM), last month as it sought more clarity on sanctions against Abramovich. read more

Evraz has said Abramovich, who has a 28.64% stake in the company and owns English soccer club Chelsea, does not have effective control of Evraz, adding it believes the company is neither designated nor sanctioned. read more

Evraz, whose shares had lost more than 60% in value since the sanctions began when they were suspended from trading on March 10, has been thrown into turmoil by the sanctions - with only its CEO remaining on the board after a director exodus, and last month a bond payment was blocked.

The West has imposed broad economic and political sanctions on Russia, Russian firms, and prominent or wealthy Russians since Moscow launched what it calls "a special military operation," in Ukraine on Feb. 24.

Britain imposed sanctions on Abramovich on March 10, freezing his assets and preventing him from travelling to the country.

Evraz said on Friday RASP would remain part of the company.

In March, index provider FTSE Russell said it would remove four Russia-focussed companies, including Evraz, from all FTSE's indexes, after many brokers refused to trade their shares. read more

Reporting by Shanima A in Bengaluru Editing by Shinjini Ganguli and Mark Potter

Our Standards: The Thomson Reuters Trust Principles.