The board of Mechel, the top steelmaking coal producer in Russia, approved a plan on Thursday to reduce the company’s debt partly by selling assets. The net debt of Russia’s most leveraged company rose 33 percent in 2011 to $9.3 billion while its proposal to sell $2 billion of Mechel-Mining shares in London ended up being postponed due to weak markets in September, Bloomberg reports.
“We don’t expect a Mechel-Mining IPO this year due to market volatility,” Stanislav Ploschenko, Mechel’s chief financial officer, said, according to Bloomberg. “We also may not sell the stake at all should our new strategy be successful and we are able to fund the mining division’s projects without an IPO.”
Mechel plans to focus on steelmaking, mining and products like specialty and stainless steel. Other assets will receive an audit for their profitability and investment requirements within two to three months.
“It doesn’t mean we will necessarily sell entire business divisions like the ferroalloys business or our power assets,” Ploschenko said, according to Bloomberg.
The most likely candidates to sell are the ferroalloys business of the company’s Oriel Resources unit and Bulgaria’s Toplofikatsia Rousse, according to a Uralsib Capital analyst.