(Corrects sale to chairman and handover to chief operating officer in first paragraph.)
OAO Mechel (MTLR), Russia's fifth-biggest steelmaker, said Chief Executive Vladimir Iorich will sell his 42.2 percent stake in the company to its chairman and hand over his post to the chief operating officer.
Iorich will sell his stake to Igor Zyuzin and hand over to Alexei Ivanushkin, Moscow-based Mechel (MTLR) said in a statement today. The transition will take a year and Iorich will continue to serve as chief executive and board member during that period. Irina Ostryakova, a spokeswoman for Mechel, declined to comment on Iorich's reasons for leaving or his future plans.
Mechel was created in 2003 from the steel and mining assets of its founders, Iorich and Zyuzin, who own about 85 percent of the company. They built up Mechel from a coal trading operation in southwestern Siberia in the early 1990s. By 2000, they had bought seven coal mines and processing plants.
Mechel sold 10 percent of its shares to the public in October last year for $291.4 million. Its American Depositary Receipts closed 2.7 percent higher at $30.33 in New York yesterday.
Zyuzin hasn't decided yet how to finance the transaction. He will retain at least a 51 percent stake in the company, Mechel said in the statement.
Mechel today also reported that it cut crude steel production by 5 percent to 5.9 million metric tons last year as prices weakened. Rolled steel output dropped 2 percent to 4.6 million tons. Pig iron production declined 14 percent to 3.3 million tons. Coal output was unchanged at 15.6 million tons.
Export prices for benchmark hot-rolled coil from the former Soviet Union dropped 31 percent last year, according to data from London-based publisher Metal Bulletin Plc.
The company plans to raise annual coal output 60 percent from production in 2004, to 25 million metric tons by 2010. The company this week said it wants a controlling stake in the Yakutugol coal mine in Russia's Far East.
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