UK regulator suspends trading of Russian steelmaker Evraz

In our ongoing coverage of the Russia-Ukraine war and its impact on metal prices, the Financial Conduct Authority, the UK’s financial regulator, has suspended trading of Russian steelmaker Evraz’s shares on the London Stock Exchange.

Russian steelmaker Evraz logo
piter2121/Adobe Stock

The move follows the government’s addition of Roman Abramovich to its list of sanctioned individuals.
The MetalMiner team will continue to break down the Russia-Ukraine war and its impact on metals markets during this month’s webinar session scheduled for Wednesday, March 30. 

UK suspends trading of Russian steelmaker Evraz

The suspension became effective from 11:00 a.m., London time, “in order to protect investors pending clarification of the impact of the UK sanctions,” the LSE said on March 10.
A notice from HM Treasury’s Office of Financial Sanctions Implementation stated that Abramovich exercises effective control in Evraz, given his large shareholding in the company as well as those of his associates, whom Abramovich could direct.
Abramovich holds the largest stake in Evraz at 28.64%. Evraz’s non-executive chairman, Alexander Abramov, holds 19.32%. Non-executive director Alexander Frolov holds 9.65%.
“Evraz PLC is or has been involved in providing financial services, or making available funds, economic resources, goods or technology that could contribute to destabilising Ukraine or undermining or threatening the territorial integrity, sovereignty or independence of Ukraine – which includes potentially supplying steel to the Russian military which may have been used in the production of tanks,” HM Treasury also stated.

The statement also noted Abramovich’s close ties to Russian President Vladimir Putin.
Abramovich is also owner of London-based soccer team Chelsea FC.
Keep tabs on the latest sanctions news and other miscellaneous MetalMiner commentary on the Russia-Ukraine crisis in the MetalMiner weekly newsletter

Share price plunge

Evraz is part of the LSE’s FTSE100 composite index. The company’s share price was 80.89 pence ($1.05) when the exchange suspended its shares. The price fell by more than half from when it was 171.25 ($2.23) pence Feb. 24. That is the day Russian military forces began their invasion of Ukraine.
The share price is down 87% from Jan. 4, however, when it began 2022 at 613.20 pence ($8), the company stated.
Evraz issued a statement March 10, denying that it has participated in any actions that could destabilize or undermine Ukraine’s territory. The steelmaker noted that it supplies long steels for infrastructure and construction applications.
Evraz’s main assets in Russia are the Zapsib plant, in Siberia. It also owns the Nizhny Tagil works in Sverdlovsk region. The company also has the Evraz Caspian Steel plant in north central Kazakhstan.
Abramovich is entitled to appoint three directors to the Evraz’s board, the group said. However, they denied that he effectively has control of the company, as he does not hold — directly or indirectly — more than 50% of shares or voting rights.
Abramovich does not have the right to appoint or remove a majority of Evraz’s board members, also directly or indirectly. He also cannot direct activities in accordance with his wishes, the group added.

History of sanctions

The sanctions against Abramovich are not the first to target metals tycoons by authorities in Europe.
The E.U. also announced sanctions against Aleksei Mordashov on Feb. 28. The E.U. froze his assets in the bloc and imposed travel restrictions as well as on Alisher Usmanov. Usmanov is a majority shareholder in steelmaking and mining group Metalloinvest via USM Holdings.
Oleg Deripaska’s EN+ Group holds a controlling stake in Rusal. It in turn holds 27.8% in base metals and precious metals producer Nornickel. EN+ Group also came under U.K. sanctions last week.
The E.U. added Dmitry Pumpyansky, owner of Moscow-headquartered TMK Group, which produces pipes for the oil and gas sector. That company also announced his resignation as a member of its board of directors.
Magnitogorsk Iron & Steel (MMK) announced March 3 that 79.76% of its shares held by Mintha Holding Limited, based in E.U. member state Republic of Cyprus, have transferred to Magnitogorsk-based Altair.
MMK Board Chairman Viktor Rashnikov remains final beneficiary of the two companies, the group stated.
The remaining 20.24% of shares remain in free float, MMK added.

One Comment

  • what happens now to retail shareholders who have Evraz shares and can non longer sell their positions?

    Reply

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