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Mechel Seeks Compensation for Donetsk Steel Plant

Steel News - Published on Tue, 22 Oct 2019

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According to Russian daily Vedomosti, Russian oligarch Igor Zyuzin has asked the government for a multi-million dollar refund to compensate for a steel plant lost by his firm in Eastern Ukraine. Mechel is also trying to negotiate a huge loan restructuring as the company says it cannot afford to make debt repayments to Russia’s largest state banks. The refund request relates to the Donetsk Electrometallurgical Plant, bought by Mechel for more than USD 500 million in 2009, but seized by pro-Russian Donetsk People’s Republic local authorities in 2016 during the war with Ukrainian government forces in Eastern Ukraine. According to the paper, Mr Zyuzin wrote to deputy prime minister Dmitry Kozak this summer requesting 18 million rubles (USD 280 million) in compensation. Mr Zyuzin also told deputy prime minister Kozak that Mechel’s cash flow problems mean it can only afford to repay the interest not the outstanding debt on its estimated USD 5.5 billion stock of loans to state banks.

The plant previously produced around one million tonnes of steel a year, although production at the site was halted in December 2012 due to unfavorable market conditions.

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Posted By : Rabi Wangkhem on Tue, 22 Oct 2019
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