Support The Moscow Times!

Shares in Russia's Mechel Jump on Hopes of Deal With Creditors

A steelworker monitoring production in one of Mechel's factories. Mechel

Shares in debt-laden Russian coal miner Mechel jumped 15 percent Tuesday morning on hopes that company will be able to avoid bankruptcy and negotiate a deal with creditors — to whom it owes about $9 billion.

The rise means Mechel equity has climbed over 40 percent since a top Kremlin official hinted Monday that a compromise was imminent, but has not yet recovered from a sell off last week after Economic Development Minister Alexei Ulyukayev suggested that Mechel would be dismantled in the insolvency courts.

Mechel is "closer than ever before" to a deal over its debts, presidential advisor Andrei Belousov was quoted by Interfax as saying Tuesday. Belousov also downplayed the significance of a court case against Mechel initiated by the company's main creditor, state-owned VTB.

Mechel shares have lost two-thirds of their value this year.

The company, which employs 72,000 people, has been struggling since the 2008 financial crisis when heavy borrowing to finance an ambitious investment program left it exposed to sliding commodity prices.

… we have a small favor to ask.

As you may have heard, The Moscow Times, an independent news source for over 30 years, has been unjustly branded as a "foreign agent" by the Russian government. This blatant attempt to silence our voice is a direct assault on the integrity of journalism and the values we hold dear.

We, the journalists of The Moscow Times, refuse to be silenced. Our commitment to providing accurate and unbiased reporting on Russia remains unshaken. But we need your help to continue our critical mission.

Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just 2. It's quick to set up, and you can be confident that you're making a significant impact every month by supporting open, independent journalism. Thank you.

Continue

Read more