Mechel is on the verge of collapse

The refusal of Vnesheconombank's management to take part in the saving Mechel has narrowed the number of possible outcomes out of the impasse for the company: industry sources that are familiar with the negotiations say that the scenarios from the dividing up of the business to bankruptcy are being considered.

Now Mechel is one of the most indebted metallurgical companies in Russia. As of mid-May information, the company’s net debt was $8.3 billion. The Government has discussed various schemes to save the company from bankruptcy for several months.

One of these schemes provided for the buying of Mechel’s convertible bonds for 180 billion rubles by Vnesheconombank and the allocation of a bridging loan. Another – the creation of a consortium on the basis of a number of assets of Mechel itself, Evraz and Amurmetal, owned by VEB, with the participation of Russian and foreign investors.