MOSCOW, June 3 A Cyprus court has frozen the
assets of three offshore entities through which Mechel's
main shareholder and chairman Igor Zyuzin owns a 67.4
percent stake in the indebted steelmaker and coalminer, Interfax
news agency reported on Monday.
Zyuzin is a controlling shareholder in Mechel, which has
been hit by weak prices for its products, forcing it to sell
loss-making assets and to negotiate delayed debt repayment with
The order was issued by a court in Cyprus on behalf of Saven
Enterprises, a British Virgin Islands-incorporated minority
shareholder in one of Mechel's subsidiaries, Interfax said,
citing a copy of the order.
In several lawsuits, Saven Enterprises accuses Mechel and
its subsidiary of using illegal schemes to spend the
subsidiary's profits on the repayment of Mechel's debts.
The injunction means those offshore companies can't dispose
of their holdings in Mechel or pledge them as collateral to
secure a loan. Zyuzin has already pledged 41.6 percent with
creditor banks which he holds through two of those firms.
Mechel denied any wrongdoing and said it would fight the
decision in the courts.
"The temporary injunctions will have no affect on the daily
operations of the company," a company spokesman told Reuters.
(Reporting by Maria Kiselyova and Polina Devitt; Editing by