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. Last Updated: 07/27/2016

Evraz Owners Expect $200M Dividend

Owners of Evraz Group, Russia's largest steelmaker, will pay themselves $200 million in dividends before an initial public offering, according to a copy of the prospectus obtained by Bloomberg.

Evraz on Thursday began offering investors 29.1 million global depositary receipts for $13.50 to $17 apiece, seeking to raise as much as $495 million. Investors who buy those shares will not be eligible for the interim dividend, the company said.

Morgan Stanley, Credit Suisse First Boston and Renaissance Capital are managing the sale.

"The company intends to pay an interim dividend in respect of the first six months of 2005 of $200 million to shareholders of record as of 31 May 2005," Evraz said in the prospectus. "Investors who purchase GDRs in the offering will not be entitled to receive any part of this interim dividend."

Chief executive officer Alexander Abramov, who controls about 65 percent of the company according to the prospectus, will receive $130 million of that dividend. Senior executive vice president Alexander Frolov has a stake of about 31 percent and will get $62 million.

Morgan Stanley and the other banks will be paid about $19.6 million, assuming an offer price of $15.25, the prospectus said. That will rise to $22.1 million if more shares are sold.

Evraz plans to invest as much as $1.4 billion through 2010, including on acquisitions in the steel and mining industries in Russia and the Commonwealth of Independent States.

Evraz plans to invest $961 million in its steel business over the next five years with almost half of that, or $411 million, being spent in 2005. About $461 million will be spent on its mining business, including $181 million this year.

Evraz earlier this month signed a preliminary agreement to buy 75 percent plus one share of Italian steelmaker Palini e Bertoli, with an option to buy the remaining stock at a later date, the prospectus said. Evraz has exclusive negotiation rights with the closely held company through the end of June.

Palini, based in northern Italy, made 356,000 tons of steel last year, selling it domestically and throughout Europe. It buys steel slabs from Evraz.

Evraz agreed last week to buy an additional 10.7 percent stake in its largest unit, Nizhny Tagil Iron and Steel Plant, for $215 million, the prospectus said. That will boost Evraz's stake to more than 91 percent.