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Russian finance minister says Mechel's bankruptcy possible

July 16, 2014, 11:50 UTC+3 FORTALEZA

Mechel's net debt stands at $ 8.3 billion

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© ITAR-TASS/Yevgeny Khazhei

FORTALEZA, July 16. /ITAR-TASS/. Russian Finance Minister Anton Siluanov does not rule out bankruptcy of debt laden metals and mining group Mechel, the minister told journalists during the BRICS summit late Tuesday.

Siluanov said that the government is considering many options, and bankruptcy is among them. “This option can also be considered among others,” he said. “But this word should not be feared. It does not mean stopping the company, firing all people. It means that a new owner should come and manage in a new, more effective way.”

On July 11, Industry and Trade Minister Denis Manturov told reporters that the government is considering various options of saving Mechel other than direct budgetary support, and bankruptcy is an undesired option. He said that the government is in talks with foreign investors on entering Mechel, whose net debt stands at $ 8.3 billion.

On July 10, Manturov said that Mechel must improve administrative control to recover financially.

On July 9, state-owned Vnesheconombank CEO Vladimir Dmitriyev said that the bank is not interested in bailing out Mechel.

In June, Kommersant said that Gazprombank, VTB and Sberbank will provide Mechel with a 215 billion rouble loan to help it repay its $8.3 billion debt, but later VTB said it will not give Mechel any money.

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