20 Jul 2009 12:38

Mechel halts placement of 45 bln rubles in bonds

MOSCOW. July 20 (Interfax) - Mechel coal and steel group has suspended the placement of 45 billion rubles in bonds due to changes in the prospectus, the company said in a statement.

The placement was halted on July 17.

It was reported earlier that Mechel is negotiating with the leading Russian banks concerning the terms and dates of the bond placement. The proceeds will be used to build the rail line from the Elginskoye coal field - a project Mechel does not want to postpone.

The Federal Financial Market Service (FFMS) registered nine issues of Mechel bonds totaling 45 billion rubles in May. Each issue consists of 5 million 1,000-ruble bonds.

The fourth and ninth issues are for seven years, the fifth and tenth for nine years, the eighth, eleventh and twelfth for 10 years and the sixth and seventh for eight years.

The bonds will be sold in an open placement with the possibility of early redemption on demand of the owners and at the discretion of the issuer. Yakutugol Holding Company is the guarantor.

Mechel has consolidated controlling shares in coal and steel companies and a number of ports. Igor Zyuzin, the chief executive, is the group's main beneficiary. The free float is around 25%.