Fitch: Magnitogorsk unchanged

Fitch Ratings said OJSC Magnitogorsk Iron & Steel Works' decision to acquire 100% of Flinders Mines Ltd. is neutral to its long-term issuer default rating of BB+, short-term issuer default rating of B, local-currency long-term issuer default rating of BB+ and national long-term rating of AA(rus).

The transaction is subject to regulatory approvals in Australia and is expected to close in March 2012.

Fitch said it expects the company will be able to keep a positive free cash flow margin during 2012 to 2013, which will contribute to a decrease of the company's gross funds from operations leverage to 1.8x by the end of 2013 compared with 2.7x at the end of 2010.

The company's profitability is in line with guidelines for BB category, the agency added.

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