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Mechel postpones placement after Wall St plunge-sources
May 7, 2010 / 8:30 AM / in 8 years

Mechel postpones placement after Wall St plunge-sources

MOSCOW, May 7 (Reuters) - Russian coking coal and steel producer Mechel (MTL.N) has postponed its U.S. share placement by at least a day following a suspected trading glitch that sent Wall Street into a tailspin, sources told Reuters.

The Justice family shareholders were due to offer up to 49.95 million preferred American Depository Shares in Mechel, representing 24.98 million preferred shares at a price range of between $10.50-$13.80 per preferred ADS. [ID:nLDE63Q049]

But on Thursday -- the day when the public offering was expected to price -- U.S. stock markets plunged as much as 9 percent as a suspected trading glitch and fears of a new credit crunch in Europe threw markets into disarray. [ID:nN06252763]

“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. I talked to the organising banks and they said that the books are open again,” he added, noting that the books would likely close on Friday.

Another fund manager said the placement had been postponed due to market conditions, but gave no further details.

Mechel -- whose ordinary shares closed 8 percent lower in New York on Thursday -- declined to comment on the placement. (Reporting by Dmitry Sergeyev; Writing by Toni Vorobyova)

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