* Sells 30.50 mln preferred ADS at $7.50 each
* Original guidance was $10.50-$13.50
* Placement postponed a day, size cut
(Adds details of placement, background)
MOSCOW, May 7 Coking coal and steel producer
Mechel (MTL.N) raised only $229 million in a delayed share
placement, less than half as much as hoped, becoming the latest
Russian firm to have its issuance marred by market turmoil.
The Justice family shareholders sold 15.25 million preferred
shares -- 39 percent less than originally planned -- in the
placement on Friday, which had been postponed by a day following
the steep plunge on U.S. bousrses on Thursday when a suspected
trading glitch and fears of a new credit crunch in Europe threw
markets into disarray. [ID:nN06252763].
The sale was for 30.50 million preferred American Depository
Shares (ADS) and was priced at $7.50 per preferred ADS, the
company said. That is well below the initial price range of
$10.50 to $13.80. [ID:nLDE63Q049]
"Nervous investors started to cancel their orders and they
(Mechel) had to react," a fund manager told Reuters. "They
reduced the size of the placement."
That makes Mechel the latest Russian company to have its
issuance plans hit by global market jitters and rising investor
Last week, fertiliser producer Uralcehm postponed a planned
IPO [ID:nLDE63T0GB], while real estate firm LSR Group (LSRG.MM)
priced a secondary placement at the bottom of an already lowered
price range [ID:nLDE63T028].
At the initial size and price guidance, Mechel's placement
had been expected to raise $524 million to $689 million for the
Justice family shareholders.
Mechel acquired West Virginia, U.S.-based Bluestone Coal
from the Justice family last April for $436 million and 83.3
million preferred shares. [ID:nLM122811] The Justice family
cannot sell the shares until they are listed on a stock
Morgan Stanley and Renaissance Securities acted as joint
bookrunners for the sale.
Mechel's ordinary shares were down 2.95 percent by 1421 GMT
in New York after losing 8 percent on Thursday.
(Reporting by Dmitry Sergeyev and Toni Vorobyova; editing by