Mechel Sinks 30% as Russia Expects Bankruptcy - Bloomberg

Mechel Sinks 30% as Russia Expects Bankruptcy - Bloomberg:



"OAO Mechel (MTL) sank 30 percent to a record low as Russia’s economy minister said he saw no alternative but bankruptcy for the mining company after nine months of unsuccessful efforts to refinance its debt.



Mechel, Russia’s biggest producer of coking coal, tumbled to $1.02 in New York yesterday as trading volume surged to 8 times the average of the past three months. The stock has plunged 60 percent this year after falling prices for the steel-making ingredient led to a record loss in 2013. The company has about $8.7 billion of bonds and loans due in the next seven years, data compiled by Bloomberg show. Analysts estimate the company will lose $591 million in 2014. 




The stock tumbled after Economy Minister Alexei Ulyukayev, speaking to reporters at a banking forum on Sept. 20, said “if the company is bankrupt, we should legally acknowledge it” and that he sees “no other way out.” While Russian banks own most of Mechel’s debt, international sanctions linked to the Ukraine war have virtually blocked them from tapping U.S. and European markets for refinancing."



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