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Gazprombank Sells 49% of Elga Coal Project

Coal News - Published on Tue, 24 Mar 2020

Image Source: Mechel Elga coal project
Russian businessman Albert Avdolyan has reached an agreement to buy a 49% stake in the major Elga coal project in Russia from Russian lender Gazprombank. Gazprombank and Avdolyan did not disclose the price of their deal. Avdolyan’s company A-Property is still in talks to buy the remaining 51% in the project from Russian steel and coal producer Mechel. The businessman may reach an agreement with Mechel by the end of April and become the owner of 100% in the project

For Mechel, Elga is the biggest growth asset, but it confirmed last week that it was in talks to sell it to reduce the debt burden. Elga, one of the world’s biggest coking coal deposits, requires further investments to develop. Mechel’s net debt stood at 400 billion rubles (USD 5 billion) at the end of 2019, mainly to Gazprombank and another bank, VTB.

Gazprombank bought this 49% stake in Elga for 34.4 billion rubles from Mechel as part of the miner’s previous round of debt restructuring talks. That time, Mechel used these proceeds to reduce its debt to another creditor.

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Posted By : Yogender Pancholi on Tue, 24 Mar 2020
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