Russia's debt-laden Mechel sells Donetsk plant for $2,700
MOSCOW Aug 20 (Reuters) - Russia's Mechel said it is selling a loss-making Ukraine steel plant to its previous owner for 2,000 euros ($2,700) plus the settlement of tens of millions of dollars of debt as it pushes ahead with the disposal of non-core assets.
The coal, iron ore and steel group, one of Russia's largest, has cut investments and put non-core businesses on the market to service over $9 billion in debt it amassed in a dash for growth before the 2008 financial crisis.
Mechel bought Donetsk Electrometallurgical Plant (DEP) from Vadim Varshavsky in 2011 for $537 million to be paid in monthly instalments until December 2018, according to company documents.
DEP posted a net loss of $50 million in 2012 and owes Mechel up to $81 million, which Varshavsky is obliged to pay back, Mechel said without stating the total debt of the plant.
"Disposal of unprofitable assets will enable us to significantly improve our operational cash flows and focus on our priority businesses - mining and high value-added steel products," said Mechel chief executive Evgeny Mikhel.
Last month Russian media reported that Varshavsky had offered to buy back DEP for $500 million, a figure analysts said was too high.
DEP produces continuous cast and rolled round billets.
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