MECHEL, FROM RUSSIA,TO SELL 49% STAKE IN ELGA COKING COAL PROJECT TO GAZPROMBANK

Russia’s mining and metals company, Mechel PAO, announced that it signed an agreement to offer Gazprombank AO an option to acquire a 49% stake in the Elga coking coal deposit development project for 34.3 billion rubles.

Under the agreement, Mechel will sell to Gazprombank 49% of shares in Elgaugol OOO, the project operator and owner of its subsoil license; 49% of shares in Elga-Doroga OOO, which owns the Ulak-Elga railroad; and 49% of shares in Mecheltrans-East OOO, which is the railroad’s transport operator by June 30.

Mechel will use the sale proceeds to repay its debt to Sberbank PAO and Sberbank Leasing AO. Partial debt repayment is a condition for restructuring of Mechel’s debt to Sberbank PAO, the company said.