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Globaltrans agrees to buy Metalloinvest’s transport unit for $540m


Russian private freight operator Globaltrans has agreed to buy the transport unit of Russia’s largest iron ore producer, Metalloinvest, for $540 million, the companies said in a joint statement on Friday April 27.

Metalloinvesttrans operates 9,202 railcars, handling 44.2 million tonnes of iron ore in 2011, the companies said.

The final value of the deal will depend on the amount of cash and debt on the Metalloinvesttrans balance sheet by the date of the transaction, which is planned for the end of May subject to regulatory approvals.

The companies said the deal would “enhance [Globaltrans’] position as a leading independent private freight rail group in Russia”. It currently operates about 50,000 rail cars.

Globaltrans will provide rail freight transportation and logistics services to Metalloinvest for three years following the transaction. It will handle all the rail transportation cargo volumes in year one based on agreed pricing terms, and 60% in the following two years based on a “right of first refusal” principle.

Globaltrans will finance the deal with its own and borrowed funds, the companies said.

Nadia Popova

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