Fitch ups Severstal outlook to positive

Fitch Ratings said it revised the outlook of Russia-based OAO Severstal to positive from stable. The agency also affirmed the ratings at senior unsecured B+, short-term B and national senior unsecured A(rus).

The rating action follows Severstal's announcement that it will not participate in the privatization tender for Ukraine-based Krivorozhstal, which could have cost at least $2 billion in initial investment.

This, together with Severstal's unsuccessful tender for a 46.12% stake in Turkey-based Erdemir, means the company's financial profile will not come under pressure from these material investments, the agency said.

Fitch said the new outlook also reflects evidence of synergies from the company's acquisition of Rouge Industries in February 2004 and continued benefits from low-cost production advantages.

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