http://www.marketwire.com/press-release/OAO-Severstal-Update-on-Crew-Gold-LSE-SV ST-1141481.htm
Apr 01, 2010 08:30 ET
OAO Severstal: Update on Crew Gold
MOSCOW, RUSSIA--(Marketwire - April 1, 2010) - OAO Severstal ("Severstal") (LSE:SVST)(RT CHMF) is issuing the following update subsequent to having requisitioned a special meeting of shareholders to reconstitute the board of Crew Gold Corporation ("Crew Gold"). Additional shareholders holding 23.53% of Crew Gold's issued and outstanding common shares support the requisition of the special meeting, which has been made to address concerns with respect to the prospect of Endeavour Financial Corporation ("Endeavour") securing undue influence or control over Crew Gold in the absence of extending an offer to minority shareholders.
Background
Bluecone Limited ("Bluecone"), a subsidiary of Severstal, announced on 25 February, 2010 that it had acquired shares in Crew Gold bringing its total interest to approximately 26.59% of Crew Gold's issued and outstanding common shares. As a result, Bluecone announced its intention to make an offer to all shareholders of Crew Gold in order that all shareholders might be treated equally.
Subsequently, a number of market purchases of Crew Gold shares by Endeavour, which acquired over 37% of Crew Gold in January 2010, were brought to Severstal's attention. Public filings made by Endeavour indicate that it has to date acquired a total of approximately 920.2 million shares in Crew Gold, representing 43.03% of Crew Gold's issued and outstanding common shares.
Severstal was concerned that the purchases by Endeavour constituted a creeping take-over bid that was not made available to all shareholders potentially depriving minority shareholders of the control premium they would otherwise receive in a formal offer. In that regard, Severstal made an application to the British Columbia Securities Commission ("BCSC") seeking an order that Endeavour not be permitted to make additional market purchases without extending an offer to all Crew Gold shareholders. This application was heard on 30 March, 2010. The application was dismissed by the BCSC.
Accordingly, and in light of the current Crew Gold share price being substantially in excess of the price at which Severstal acquired its interest, Severstal confirms that it will no longer be making a tender offer to the shareholders of Crew Gold.
Severstal Requisitions Special Meeting of Crew Gold Shareholders
Severstal continues to be concerned with respect to the prospect of Endeavour securing influence or control over Crew Gold and notes that Endeavour has had three delegates on the board of directors of Crew Gold throughout the period during which it has conducted its most recent purchases of Crew Gold shares.
Severstal has made several offers of financial and related assistance to Crew Gold and its board but has received no official response. Consequently, Severstal has requisitioned a special meeting of shareholders, at which it intends to reconstitute the Crew Gold board of directors. Additional shareholders holding 23.53% of Crew Gold's issued and outstanding common shares support the requisition of the special meeting.
Severstal will seek board representation commensurate with its shareholdings and intends to continue to offer Crew Gold strategic, operational and financial assistance.
Nikolai Zelenski, Chief Executive Officer of Severstal's Gold Division, commented, "As a successful operator of a gold business in Russia, Kazakhstan and Africa, Severstal is confident that it will be able to provide considerable assistance to Crew Gold, particularly with respect to recent operational challenges that Crew Gold has encountered. We are committed to the equitable treatment of all shareholders and look forward to a long and fruitful relationship with Crew Gold and to providing such resources as may be helpful and appropriate going forward."
Severstal will keep relevant constituencies updated as appropriate.
