Daily analyst comments

Severstal may begin to sell US assets this summer


	Severstal

Capitalization: 12 584 779 142,05 $

Common shares
Rating	Buy
Price	12,49 $
Target price	17,70 $

Price changing
week	month	year
3,5%	-1,2%	95,4%

17.06.09 11:36

Severstal could start to sell-off US assets as early as August. The steelmaker’s willingness to divest itself of unprofitable US assets may send a positive message to investors in the short term.

Severstal has signed a statement of intent with NATCO on the sale of the Allenport plant, a company spokesperson announced on June 16. The plant is part of Severstal Wheeling and has a capacity of one million tons, or just under 10% of the US division’s total production capacity. Allenport has been standing idle for over a year. Details of the deal have not been disclosed, but it is known that the transaction may be closed as early as August.

The company’s US division posted a negative EBITDA result of about USD 243 million for the first quarter, and the management’s willingness to get rid of unprofitable US-based assets may send a positive message to investors in the short term. We keep our twelve-month target price for Severstal shares unchanged at USD 6.50 per share.

Vladimir Sergievskiy

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