International company Middlesex, Детальна інформація

Since it gained the control over DRI exports, MiddleSex has managed to significantly expand the company’s customer base. Currently, OEMK’s DRI pellets feed steel mills in USA, Spain, Germany, Italy and Mexico.

According to my observation I believe that a vertical integration of

MiddleSex’s steel activities is possible and would be highly beneficial for both partners. Assuming that MiddleSex takes an equity interest in

Lebedinsky GOK, the raw material supplier (such as iron ore), and increases its equity interest in OEMK, MiddleSex would have an economic exposure to entire steel operation, from the raw material (Lebedisky), through the steel mill(OEMK) to trading (MiddleSex/WolffSteel)

Non-ferrous Metals

Aluminium was one of the original businesses which Masoud Alikhani injected into MiddleSex when he joined in 1993. The aluminium business was built upon Mr. Alikhani’s trading relationship with Tadaz, the third largest aluminum smelter in the world, located in Tajikistan. Historically, the relationship with Tadaz was that MiddleSex would supply the aluminium; it would pre-finance the processing and in return it would receive the aluminium which it would then sell in the international markets. The relationship worked profitably. However, throughout 1996, the political situation in Tajikistan deteriorated, trading cycles became longer and no deliveries were made in the last six months of 1996, leaving MiddleSex owned some US7.9m(Ј 4.6m). MiddleSex believes it will recover this debt: it has already received US$2.4m(Ј 1.5m) in late June 1997. Negotiations are well advanced to collect the balance.

During 1996 MiddleSex diversified its non-ferrous business into nickel. In October 1996 it entered into a short-term pilot contract with

Napo Invest and Trade Corp., a company incorporated in the British Virgin

Islands and run by Mr. Yuri Murkin, a business associate of Mr. Alikhani, and two Russian companies: Koks, which owns the Kemerovo coke plants and

Kombinat Yuzhuralnikel, one of the biggest Russian nickel producers.

The government recently sold its 38% in troubled Norilsk Nickel, the biggest but also heavily debt-ridden Russian nickel producer. Following the

Norilsk example, Yuzhuralnikel could be the next to be auctioned. Interfin,

MiddleSex’s 40% owned investment, has already secured a 14.7% interest in the Yuzhuralnikel nickel plant, which gives MiddleSex a 5.9% indirect interest.

Overall I believe that MiddleSex is in strong position if it decodes to increase its interest in

Yuzhuralnikel and therefore its Yuzhuralnikel exposure to nickel. However,

I have assumed that MiddleSex will only extend the trading with

Yuzhuralnikel.

Financial Services

The backbone of MiddleSex’s financial services operations is the 40% owned Interfin (Interbank Investment and Finance Company). The remaining

60% is held by GAZPROM (20%), OEMK(20%) and Mapo Bank(20%). MiddleSex’s financial services include:

. trading in Russian capital markets;

. financial advise to western companies or potential business in Russia, and

. advice to Russian companies entering western capital markets.

Established in late 1994, Interfin commenced by trading in Russian treasury. Initial returns were good and Interfin quickly made substantial profits, which enabled the company to start bying stakes in various

Russian companies. As a result, Interfin has built an impressive asset base of which the company estimated to be in excess of US$300m.

MiddleSex - GAZPROM relationship

MiddleSex holdings - a small, London based trading group - is advertising the world biggest producer and Russia’s biggest company GAZPROM on cheaper ways to raise finance. The appointment came as a result of the close contact between MiddleSex’s and Interfin’s top management and

GAZPROM. Principally the role consist of :

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