Russia’s Mechel inks option deal to sell 49% in Elga to Gazprombank

MOSCOW, Apr 4 (PRIME) -- Russian debt-ridden metals and mining group Mechel has concluded an option agreement to sell 49% in the Elga coal project in the republic of Yakutia to Gazprombank for 34.3 billion rubles, the company said in a statement on Monday.

Under the deal, Mechel will sell 49% in Elgaugol, the operator and owner of the license for the Elga deposit, 49% in Elga-Doroga, which owns the Ulak–Elga railroad, and 49% in Mechel Trans Vostok, which operates the railroad, no later than on June 30.

Mechel will use the funds raised in the deal to redeem its debts to top Russian lender Sberbank and Sberbank Leasing.

Gazprombank has an option to sell a stake in the project back to Mechel during three years after five years of ownership.

(67.1410 rubles – U.S. $1)

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