MECHEL ANNOUNCES CLOSURE OF THE DEAL ON SELLING ELGA PROJECT SHARE
Moscow, Russia — June 28, 2016 – Mechel PAO (NYSE: MTL, MOEX: MTLR), a leading
Russian mining and metals company, announces the closure of the deal on selling
to Gazprombank AO the 49% share in the Elga coking coal deposit development
project for 34.3 billion rubles.
According to the agreement, Mechel sold to Gazprombank 49% of shares in Elgaugol
OOO, the project operator company 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 Vostok OOO which is the railroad’s transport operator. The cost
of these shares totals 34.3 billion rubles.
“Together with Gazprombank we have walked the long and difficult path of
restructuring Mechel’s debt, and now, building on our partnership, we have
exercised the Gazprombank’s option to purchase the 49% share in Elga Coal
Complex. Completion of this deal will not only help decreasing Mechel’s debt,
but will also enable us to further develop the Elga deposit, which has
tremendous importance for Russia’s mining industry,” Mechel PAO’s Chief
Executive Officer Oleg Korzhov noted.
Note to editors:
The Elga coal deposit is Russia’s largest and one of the world’s largest
deposits of high-quality coking coal, located in South Yakutia. Its reserves
amount to approximately 2.2 billion tonnes according to JORC.
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Mechel PAO
Ekaterina Videman
Tel: + 7 495 221 88 88
ekaterina.videman@mechel.com
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Mechel is an international mining and steel company which employs over 66,000
people. Its products are marketed in Europe, Asia, North and South America,
Africa. Mechel unites producers of coal, iron ore concentrate, steel, rolled
products, ferroalloys, heat and electric power. All of its enterprises work in a
single production chain, from raw materials to high value-added products.
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Some of the information in this press release may contain projections or other
forward-looking statements regarding future events or the future financial
performance of Mechel, as defined in the safe harbor provisions of the U.S.
Private Securities Litigation Reform Act of 1995. We wish to caution you that
these statements are only predictions and that actual events or results may
differ materially. We do not intend to update these statements. We refer you to
the documents Mechel files from time to time with the U.S. Securities and
Exchange Commission, including our Form 20-F. These documents contain and
identify important factors, including those contained in the section captioned
“Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in our
Form 20-F, that could cause the actual results to differ materially from those
contained in our projections or forward-looking statements, including, among
others, the achievement of anticipated levels of profitability, growth, cost and
synergy of our recent acquisitions, the impact of competitive pricing, the
ability to obtain necessary regulatory approvals and licenses, the impact of
developments in the Russian economic, political and legal environment,
volatility in stock markets or in the price of our shares or ADRs, financial
risk management and the impact of general business and global economic
conditions.