MOSCOW Feb 8 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,
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)