Russia's Mechel eyes $4 bln Frankfurt IPO-paper

MOSCOW Fri Feb 8, 2008 3:17am EST

MOSCOW Feb 8 (Reuters) - Russian steel maker Mechel (MTL.N) is considering listing its mining division in Frankfurt in an initial public offering that could raise around $4 billion, Russian business daily Kommersant reported on Friday.

Kommersant, citing an official within an unnamed metals firm, said Mechel (MTLR.RTS) aimed to sell a 20 percent stake in a newly created mining division which it values at $20 billion -- considerably more than the entire company's current value.

New York-listed Mechel, Russia's sixth-largest steel maker, has a current market capitalisation of $8.3 billion, but has acquired extensive coal assets in the country's far east.

Kommersant quoted the official as saying Mechel's billionaire owner, Igor Zyuzin, could announce details of the IPO within the next few days. In December, Zyuzin told reporters in Moscow about the planned listing, without giving details.

Mechel declined to comment on Friday.

Mechel Mining would include the company's stakes in coal firms Yuzhny Kuzbass, Yakutugol and Elgaugol and may also include the Korshunov iron ore mining and concentrating plant, Kommersant said.

Mechel last June unveiled a $2.7 billion investment plan -- $1.5 billion for its steel plants and $1.2 billion for its mines -- to boost output over the next five years.

It has since spent 58.2 billion roubles ($2.36 billion) to win access to large coal deposits in the far eastern Russian region of Yakutia. These include the Elga deposit, potentially Russia's largest coal field. (Reporting by Anastasia Teterevleva, writing by Robin Paxton)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.