Mechel aims by end Q1 to close talks with Gazprombank on sale of stake in Elga coal project
MOSCOW. March 4 (Interfax) - Mechel aims by the end of Q1 2016 to round off talks with Gazprombank on the sale of LLC Elgaugol, which holds the license to the Elga coal field, Oleg Korzhov, the CEO of Mechel, said during an extraordinary meeting of Mechel shareholders.
"We hope to conclude discussions about the terms for the deal before the end of the first quarter," he said.
"The [negotiating] process is under way, and it is fairly difficult. We've reached a compromise, an understanding on many issues, but unfortunately we are unable to disclose any details about the understandings reached with Gazprombank," Korzhov said.
Mechel may sell 49% of Elgaugol, which owns the licenses to the Elga coal field and the railway to it, to Gazprombank for $500 million-$550 million, Vedomosti has reported, quoting its own sources. The remaining 51% will remained owned by Mechel.
The obligatory condition of the deal is that Mechel should receive an option for the return purchase of the company's shares, an employee of the company's creditor bank said.
At the end of last year, it was reported that VTB is participating in talks on the sale of an Elgaugol stake together with Gazprombank. However, this bank will not participate in the deal, one of Vedomosti's sources said.
Elgaugol is valued at $1 billion-$1.1 billion. Mechel has invested $2.5 billion the development of the Elga field.
