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By John Helmer, Moscow

At the conclusion of a share buyback offer, Severstal has announced that 170 million of the 1.01 billion shares outstanding will be purchased. Alexei Mordashov, the control shareholder with 66% of the shares before the buyback, tendered his shares to the offer in full, as did the associated control company, Lybica Holding, with 19%. There was relatively low participation on the part of investors and shareholding institutions which comprise the current 15% free float.

Once the buyback has been completed and the company-owned shares cancelled, the new shareholding structure will be 79% for Mordashov, 3% for Lybica, and a free float of 18%. Depending on how you calculate Mordashov’s control in combination with Lybica, and how passive the free floating investors are, along with the five so-called independents on the board of directors, Mordashov is either much bigger; slightly smaller; or is playing a little (big) trick on everyone.

“The low participation of institutions was expected since the share price reached and exceeded the buyback price toward the end of the buyback tendering period,” reports Barry Ehrlich of Alfa Bank.

Speaking of his future plans at a commissioning ceremony on June 21 for two new production lines at the Severstal mill in Dearborn, Michigan, Mordashov is quoted by news agencies as saying: “We don’t have any plans [to buy new plants] for the moment, just because we have to harvest the results of our investments first. We are in a ramp-up period…It’s not our primary goal to be the biggest, anywhere. We appreciate size but only if it is robust growth. Just to be big is not a target.”

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