LONDON, April 26 (Reuters) – Indebted Russian steel group Mechel has backed off from selling up to 25 percent of its mining division because of market conditions, sources with knowledge of the matter said.
- Mechel Mining stake sale on ice until late 2013
- Mechel seeking to cut debt pile of more than $9 billion
- Mining assets include Elga coal deposit in eastern Siberia
- Could seek Russian bank support to develop Elga
The New York-listed coal, iron ore and steel group, one of Russia’s largest, has had to cut investments and put non-core assets on the market to service more than $9 billion in debt, amassed while expanding operations before the 2008 financial crisis sent steel and coal prices tumbling.
But three sources said Mechel, whose mining division includes the Elga coal deposit in Siberia, has now put on hold the sale of a stake in the division until later in 2013, following months of negotiations with potential buyers. A sale had been valued at up to $1.25 billion.
Mechel is awaiting an improvement in coal prices and both the company and potential buyers want more time for a complex valuation process to be completed.
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