Fitch's MMK ratings unaffected

Fitch Ratings said that Russia-based OJSC Magnitogorsk Iron & Steel Works' ("MMK") BB- issuer default rating and stable outlook will not be affected by the recent acquisition of a 75% stake in Pakistan Steel Mills Corp. by an acquisition made with a consortium including MMK, Al-Tuwairqi and Arif Habib Group.

As a lead partner in the acquisition consortium, MMK will finance the main part of the transaction. The consortium submitted the highest bid of $361.8 million, which the Pakistani government is expected to formally accept within 30 business days.

MMK had a net cash position of $499 million at the end of 2005, which is sufficient to finance the purchase without it taking on additional debt. Therefore, the acquisition will not materially change the operating or financial profile of MMK and is credit neutral, the agency said.

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