Russian Railways not to buy "Mechel"’s railroad to the Elga deposit.

 Russian Railways has decided once again to provide "Mechel" the financial support . The railway monopoly has not found the money to buy the road leading from the BAM to the Elga coal deposit (321 km), two federal officials told "the Vedomosti" and a person close to the Russian Railways confirmed the information. "Mechel" asked for 70 billion roubles for it. It was planned that the Russian Railways will buy the railroad out of the federal budget funds, which are required to increase spending on the program of the BAM and the Trans-Siberian development (now – it’s 562 billion roubles before 2018) "the Vedomosti" interlocutors explain. But they failed to negotiate with the government.

The railroad sale would help "Mechel" to get out of a difficult financial situation. In December 2013 the net debt was $ 9.4 billion and EBITDA of the last six months is decreasing: in the II quarter of 2013 it amounted to $ 202 million, and in the III quarter - $ 196 million. In order to avoid a default, at the end of last year "Mechel" entered the negotiations with the banks, so that they have not tested its credit quality till the end of 2014. The agreement with most of the banks was concluded. However, in early 2014 Alfa Bank demanded the immediate return of $ 150 million, taken last summer, but "Mechel" failed to agree with him about the repayment of the loan installments.