Novolipetsk to Control Maxi Group

YEKATERINBURG -- Steelmaker Maxi Group said Friday that it would sell a 51 percent stake to Novolipetsk Steel by the end of the year after a deal to sell to billionaire Alisher Usmanov fell through.

Alfa Bank, which is organizing the transaction, said the deal would involve Novolipetsk supplying an immediate $400 million loan to Maxi as well as refinancing debt incurred by its subsidiaries and funding an expansion program.

Maxi spokesman Alexander Popov said the firm's owner, Nikolai Maximov, planned to close the deal by the end of 2007. Novolipetsk is owned by billionaire Vladimir Lisin.

Novolipetsk said in a statement that it had reached an agreement in principle on the acquisition of a controlling stake in Maxi and that a deal was expected by the end of the year, subject to shareholder approval.

Yekaterinburg-based Maxi plans to build a network of steel furnaces and rolling mills with annual capacity of up to 10 million tons of finished products -- five times what it currently produces.

The company said this month that it had signed a deal to sell a 50 percent stake to Usmanov, the main owner of steel maker and iron ore miner Gazmetall. But Usmanov's company issued a statement on Thursday saying the deal had been scrapped.

Maximov earlier wrote an open letter to President Vladimir Putin in which he said subsidiaries could not refinance debts because of the liquidity crisis.