Russian steel firm Mechel has withdrawn its offer to sell off 25% of its mining division due to tepid market conditions. This was confirmed by sources with intimate knowledge of the matter.
The financially beleaguered coal and steel group has cut its investments and placed non-core assets in the market in a bid to raise funds to pay off more than US$9 billion in current debt. The debt was amassed by the New York listed firm during its expansion operations prior to the 2008 financial crisis that caused the price falls in steel and coal.
According to the anonymous sources, Mechel which has mining interests in the Elga coal deposit in Siberia, has placed the sale of its intersts in shareholdings until late 2013 as it has continued to undertake negotiations with potential buyers. The price tag for the sale has been valued up to US$1.25 billion.
Mechel has not abandoned the sale process as there are many potential suitors for the interests in Southeast Asian steel producers. These potential buyers require further infromation before progressing with the negotiations.
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