Mechel shares in record fall

Yesterday, Mechel’s shares at the Moscow exchange fell by almost 50% without any apparent cause, this set a record of fall for large issuers. The company’s financial position is complicated: Mechel, which debts make up over $9 billion, is holding difficult negotiations with banks ona  review of its loans terms. But, according to the Kommersant, there weren’t serious problems during the negotiations and Mechel could become a victim of panic among brokers.

The price of securities of Igor Zyuzin’s Mechel (he owns 67.42% of shares) fell to their historical minimum at exchanges in Moscow and New York yesterday. The decrease of rates at the Moscow exchange took place from the beginning of trading, but it accelerated after 17:00 and the price of ordinary shares fell by 47% to 50.7 rubles by 18:09. This is lowest rate in the history of the security. By results of the trading, 56.3 rubles were proposed for the company’s ordinary share and the whole company was valued at 23.73 billion rubles ($723 million). The trading of Mechel’s securities at NYSE also started the fall: at the beginning, the company’s ADR fell in price by 42% to $1.65 (the company valued at $686.9 million), but they increased to $2.26 by 20:30 of Moscow time that is by 21% less than on Tuesday.