Mechell buys Oriel for $1.5 m., the producer of ferrochrome and nickel,

/REUTERS, Moscow, Anastasia Teterevleva, March 26, 08/ - Mechell, Russian metallurgic giant, offered Oriel Resources plc shareholders to sell their company, which was estimated on $1.5 m., and had already received an agreement of almost half of Oriel shareholders, which produces nickel and ferrochrome in Russia and owns mines in Kazakhstan. Mechell offered to pay for Oriel share $2.1986 by cash, which represents by itself 13.7percentage premium rate to price of trade's closing in London on February 29, a day before announcement of negotiations of Mechell and Oriel. Board of directors of Oriel recommended to accept an offer to shareholders. Besides, holders of 46.6% of shares have already agreed to sell the shares to Mechell, is informed in the joint message of the company. The deal should have approved by antitrust bodies of Russia and Kazakhstan. Mechell intents to pay the deal partly by own means, partly - thanks to a credit of $1.5 bn. that is organized by ABN AMRO and Merrill Lynch, is informed in the message. "We are continuing a realization of a strategy, directed on efficiency upgrading of our steel subdivision. An acquisition of Oriel will allow Mechell to increase the competitiveness thanks to widening of existing production of ferroalloys, entrance of new markets, and management of a new production capacity", - is cited in the message of Igor Zyuzin, the main beneficiary and head of Michell. Merrill Lynch is going to consult Mechell. Mechell intents to conduct delisting of Oriel from London and Toronto exchanges after conclusion of the deal. Oriel Resources was registered in United Kingdom in 2003. Shares are traded on AIM in London and Toronto. The company owns Tikhvin ferroalloy plant outside Saint-Petesburg, where the production of ferrochrome started in 2007, and two minefields in Kazakhstan - "Voskhod" and "Shevchenko". Spot prices on high-carbon ferrochrome, produced on Tikhvin plant, increased more than in three times from the last year. In 2007 Oriel produced 28,770 tons of ferrochrome. In 2008 the company is planning to increase the production up to 148,000 tons, by 2011 - up to 180,000 tons. According to the last available statement of Oriel, in 2006 its loss before the payment of taxes was $7.2 m., and by June 30, 2007 its volume of assets was $572 m.. [2008-03-26]