The Donetsk Electrometallurgical Plant (DEMZ), which the Mechel group (Russia) has returned to its previous owner Vadim Varshavsky, plans to re-launch its operation in the first week of September, the Interfax Ukraine news agency reports, citing DEMZ’s General Director Gennady Ovchinnikov.
"Regarding the launch of the plant, the launch of the DEMZ is scheduled for the first ten days of September," he said.
As reported, Mechel shut down the DEMZ at the end of 2012 because of the difficult situation in the markets of metal products.
In mid-August this year, it was reported that Mechel had signed an agreement with Varshavsky on sale of the DEMZ to the latter for EUR 2,000. The buyer assumed the obligation to pay up to USD 81 million in DEMZ’s debt to Mechel (depending on the time of payment). Operational management of the plant was expected to be transferred to Varshavsky soon. The deal will be closed at the end of 2013.
Mechel acquired the plant from entities belonging to the Alfa Group, which was the largest creditor of Varshavsky’s companies, in 2011. The value of the deal was USD 537 million, which Mechel was due to pay in equal installments until December 2018.
The Donetsk Electrometallurgical Plant (formerly known as the ISTIL Ukraine Donetsk metallurgical plant) is a modern non-integrated mini steel mill. The equipment at the plant includes an electric-arc-furnace shop and a scrap shop. The DEMZ is capable of smelting more than 1 million tons of steel per year.
