MOSCOW, August 16 (RIA Novosti) – Debt laden Russian steel and coking coal giant Mechel is looking to sell its only asset in the United States, the company confirmed late Thursday.
Mechel bought Bluestone, a coal mining complex in West Virginia, four years ago just before a collapse in demand triggered by the 2009 financial crisis. In October 2012 the company was forced to temporarily idle Bluestone because of adverse market conditions, but said it had resumed production there in January.
“We have hired [US investment bank] JP Morgan to asses our strategic options in regard to Bluestone,” a Mechel spokesperson said, the Prime news agency reported. “An alternative to selling could be a union between Bluestone and other north American producers.”
The company is planning to hold a roadshow to try and find a buyer in the fall, according to a report in Vedomosti newspaper Friday.
Mechel, which has total reported debts of about $9.2 billion, did not say how much it was seeking for Bluestone, but analysts estimate that under current market conditions it could be worth between $250 million and $300 million. Mechel paid $425 million plus shares for Bluestone in 2009.
Slowing demand growth and recent oversupply in the large Asian market has exacerbated difficult economic conditions for Bluestone, which some analysts estimate is currently loss-making.
