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TMK, a Russian manufacturer of gas and oil pipelines, has agreed to sell its US badets to Tenaris, Milan, for $ 1.2 billion, the company said on Friday.
Shares of the Moscow-listed group added up to a quarter of their value during Friday's trading and recently reached around 59.08 RBS after the company announced the sale of one of the main producers of tubes without welded and welded in North America.
TMK had previously considered including IPSCO in an initial public offering of $ 615 million, but deferred the plan last year.
The transaction is "in line with our strategy, which emphasizes the monetization of our international badets," said Dmitry Pumpyansky, President of TMK. "The terms of this transaction would represent a significant increase in value for all TMK shareholders."
The cash-free, debt-free sale, including $ 270 million in working capital, is "fundamentally positive for the stock," said Oleg Petropavlovsky, BCS Senior Analyst, in a note. The deal could reduce TMK's $ 2.4 billion net debt by 50 percent and interest payments by about $ 250 million, he added.
"The only risk we see is if management decides to spend money, not for debt repayment, but for mergers and acquisitions or something different. But we see very little risk of this happening, "he said.
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