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Mechel Drops Option to Buy Back Stake in Elga Coal Mine

Coal News - Published on Thu, 23 Jan 2020

Image Source: Mechel Elga Coal Mine
Russian steel and coal producer Mechel has decided not to buy back a stake in its biggest asset, the Elga coal mine in Russia's far east. Gazprombank, which has held the stake since 2016, said on that Mechel had failed to exercise this pre-emptive right to buy a 34 per cent stake back in time and that the bank would consider options for further action.

Mechel is engaged in talks with its creditors about restructuring USD 6 billion in loans. It sold a 49 per cent stake in its Elga project, one of the world's largest coking coal deposits with reserves of 2.2 billion tonnes, to Gazprombank in 2016 as part of a debt restructuring process. A Mechel representative said that it has received an alternative offer regarding the Elga coal project, which is why it chose not buy Gazprombank's stake. It said more time was needed to study the new offer, but provided no further details.

Along with Gazprombank, Sberbank and VTB are Mechel's main creditors.

Source :

Posted By : Arun Huidrom on Thu, 23 Jan 2020
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