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. Last Updated: 07/27/2016

Steel Giant Severstal Confirms Purchase of Shares in Carmaker

Leading steel producer Severstal has confirmed it purchased a major block of shares in the Ulyanov Automobile Factory, or UAZ, the largest producer of off-road vehicles in the country.

The company, based in Cherepovets in northern Russia, provides 90 percent of UAZ’s metal requirements.

This year, deliveries to UAZ doubled to 106,000 tons, which Severstal hopes to increase to 160,000 tons in 2001.

The shares were purchased by a Severstal subsidiary, Severstal-Invest, the company’s press service said Thursday.

The shares were acquired on the open market; however, the size of the block and the cost of the deal were not disclosed.

"It is not a controlling stake, but it is large and will certainly enable Severstal to influence the work of the car plant," the press service said.

The state owns 11 percent of the factory’s shares, while the Russ Invest company has a further 20 percent stake.

The remaining shares are split among smaller shareholders.

Severstal general director Alexei Mordashov said the company plans to increase production two to three times at the factory, which over the first eight months of this year produced 55,000 automobiles.

Next month, a coordinating board will start work on pricing policy, consider new types of products and examine technical and economic issues.

Severstal is not planning any sudden personnel changes at the factory.

Severstal called the purchase a good way to enter the consumer metals sector.

Mordashov said UAZ is the most promising car factory in the country.

"Other factories work in a much more competitive niche. UAZ has massive export potential, principally to third world countries," he said. "We are counting on increasing production two to threefold."