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Interfax agency of Russia reported today that Russia’ state owned corporation Rostech shall sell its 49% stake in JVs Erdenet and Mongolrostsvetmet. The RT Business Development of investment holding Rostech reported that the agreement was signed on Tuesday.

The transaction value was not specified, however "Business Development PT" refers to the received amount is "the largest in the history of" Rostech" with direct cash funds.

Earlier, Bloomberg reported that "Rostech" can get $ 500 million for Mongolian assets.

"The transaction was closed on mutually beneficial market conditions for Russia and Mongolia. The price for 49% shares was valued at a premium to the market, taking into account the quality of the assets and their development potential. Terms of the agreement were rated by independent international auditors and consultants, said the PT Business Development.

The decision to cash the 49% in mining enterprises was agreed considering measures to increase the shareholder value of companies, as well as the need of cash flow to implement a number of projects within the corporation's development strategy until 2025. 

"Rostech" implemented a comprehensive action plan for the management of enterprises, the anti-crisis program to reduce costs and increase production efficiency, optimize administrative costs and led the corporate governance standards in line with international standards. This set up has created additional value of an asset, and allowed to make favorable deal for both sides.

"Rostech" received 49% of "Erdenet" in accordance with decree of the President of Russia signed on July 10, 2008. Rostech also represents Russia’s interests in "Mongolrostsvetmet". The remaining 51% is owned by the Mongolian state.

"Erdenet" is the largest producer of copper concentrate in Mongolia. The enterprise currently exploits Northwest area which contains approximately six million tons of copper and 170 thousand tons of molybdenum.

"Mongolrostsvetmet" exports to Russia fluorspar concentrate for the aluminum and chemical industries, and metallurgical plants. 

Монгол эхийг унших бол энд дарж орно уу

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