Translated material
The helmsman returns
Alexander Abramov again headed the board of directors of Evraz Group
Evraz Group, one of the largest metallurgical companies, announced yesterday that the company’s founder and one of its owners, Alexander Abramov, will again become chairman of the group’s board of directors after 2.5 years. In this post, he will replace Alexander Frolov, who now remains only the president of the company. Evraz explains that “the main goal of organizational changes is to expand the ability to solve strategic and tactical problems” of the group. “Having headed the board of directors, Mr. Abramov will be responsible for coordinating its work, as well as building a constructive dialogue with all parties interested in the long-term and sustainable development of the company, which is especially important in a changing market situation,” the company said in a statement. Mr. Frolov will continue to be responsible for the day-to-day management of the company's metallurgical and mining enterprises in Russia and abroad, as well as for the synergy of vertical and horizontal integration of the company's divisions around the world.About 73% of Evraz shares are owned by Lanebrook, the beneficiaries of which are the investment company Millhouse, which manages the assets of Roman Abramovich and his partners (50%), as well as Messrs. Abramov and Frolov (together - 50%). Less than 10% belongs to shareholders of the Ukrainian group Privat (including businessman Igor Kolomoisky). 17.4% of shares are in free float.
Mr. Abramov has been working in senior positions at Evraz since the formation of the Evrazmetall company in 1992, of which he was one of the founders. Until January 1, 2006, he served as president of the Evraz Group, and then until May 1, 2006, as chairman of the company's board of directors. Recently, he was only a member of the board of directors of Evraz Group (without executive powers). In 2006, Mr. Abramov was replaced as president of the company by the managing director for operating activities of the company, the former Minister of Economy of Ukraine Valery Khoroshkovsky, and Mr. Frolov became the chairman of the board of directors. Then Mr. Abramov said: “As a major shareholder, I am very pleased with the company’s achievements. Now that it has become a public company, the separation of the roles of president and chairman of the board of directors will help improve the level of corporate governance. I am confident that I am leaving the management of the company in the capable hands of two talented managers with whom I have worked closely for many years.” However, later both positions were taken by Mr. Frolov.
According to analysts, the current personnel reshuffle is not accidental. “The main reason is the financial crisis. Mr. Abramov created the company, essentially, from scratch, and has anti-crisis experience in 1998. And in conditions where, due to debts, it may be necessary to part with some assets in 2009, he looks like a quite suitable candidate for the post of chairman of the board of directors, says Evgeny Ryabkov from Pioglobal Asset Management. -- In addition, it is still unknown how 2009 will develop for metallurgists; they will probably have to take very tough measures in terms of cost reduction; mass layoffs are possible at the city-forming Evraz plants - Zapsibe or NTMK. And Mr. Abramov could cope with such tasks with greater efficiency.”
In addition, Mr. Abramov’s Evraz is the only asset that would be critical for him to lose, says Dmitry Smolin from Uralsib. “Therefore, it is not surprising that during the crisis he decided to somewhat relieve Mr. Frolov and take the helm again,” the expert noted.