MOSCOW, May 13. /ITAR-TASS/. Igor Zyuzin’s Mechel mining and metals company is negotiating selling a share in its Elgaugol company with South Korean Posco and Chinese Baosteel, the Vedomosti daily reports with reference to two sources close to a Posco’s counterparty and Mechel.Elgaugol owns a license for developing a huge coking coal field in the Republic of Yakutia. Posco can involve a Japanese bank, whose name the source did not mention.
Japan Bank for International Cooperation’s spokesperson had earlier told the paper it could also consider cooperation with Mechel if other Asian companies or investors demonstrated interest in the deal.
The source close to Mechel said Baosteel also took part in the talks. Neither of the sources was familiar with the details of negotiations in process.
According to the Executive Secretary of the Russian-Chinese Chamber, Sergey Sanakoev, Baosteel’s negotiations with Mechel have been underway for six months. The company is keen to acquire from 26 to 50% of the project and interested in joint infrastructure development, including construction of a terminal with a throughput of 3 million tonnes a year in the Vanino sea port.
Mechel holds almost 100% of Elgaugol shares. Another shareholder is Vnesheconombank (VEB) with 0.01%, which it acquired for 100 rubles (about $3) in exchange for a $2.6 billion loan for the field development, 49% pledged as collateral.
Mechel is in need of money to repay its debts. As of early December 2013, the company’s net debt totaled $9.4 billion, while its loss for 9 months of 2013 amounted to $2.2 billion; EBITDA in the same period was recorded at $608 million. Late last year Mechel announced plans to sell $1 billion worth of non-core assets in 2014.