Mechel to spend $100 million on share buyback

In spite of the net debt at the amount of $9.2 billion and the loss, Mechel has decided to support the quotations of its own shares and announced the $100 million buy back. Analysts say, this decision is “absurd” and state this support cannot last long. The sources say, it is necessary to increase the value of the shares so that the owner of Mechel Igor Zyuzin didn’t have to increase the amount of the shares pledged under the credits.

The company will redeem ADR circulating at NYSE for its ordinary shares. “The redemption will take place at the open market or by means of private transactions depending on market conditions”, it can be stopped whenever the company decides, is said in its report. The ADR will be redeemed by the subsidiary of Mechel Skyblock Limited.