Aug. 1 (Bloomberg) -- Yildirim Group of Turkey agreed to buy ferroalloy assets from OAO Mechel for $425 million as Russia’s largest coking coal producer seeks to reduce debt.
Mechel signed an agreement with closely held Yildirim to sell the Voskhod Mining Plant in Khromtau, Kazakhstan, and the Tikhvin Ferroalloy Plant in Russia’s Leningrad region, the Moscow-based company said in a statement today. The deal requires approval by Kazakh and Russian regulators, it said.
Mechel, among Russia’s most indebted mining companies, is seeking to sell assets at home, in Kazakhstan and in eastern Europe to cut $9.55 billion of debt after a drop in commodity prices eroded profit.
“The funds our company will get from this deal will help the company to deleverage and continue to finance its priority development projects,” Chief Executive Officer Yevgeny Mikhel said in the statement.
Mechel posted a $321 million net loss in the first quarter as coal prices declined because of weakening demand. Mechel’s ferroalloy devision contributed 2 percent to its earnings before interest, taxes, depreciation and amortization in the three months.
Mechel advanced 3.1 percent to 99.90 rubles in Moscow trading by 4:57 p.m.
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