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Mechel seeks to buy Raspadskaya coal company for $1.8-2.3 bln

© RIA Novosti . Alexei Nikolskiy / Go to the photo bankRaspadskaya
Raspadskaya - Sputnik International
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Mechel, Russia's leading producer of coal for the steelmaking industry, is in talks over the purchase of the Siberia-based Raspadskaya coal company but is only prepared to pay a third of the sum requested by Raspadskaya shareholders, sources familiar with the negotiations said on Tuesday.

Mechel, Russia's leading producer of coal for the steelmaking industry, is in talks over the purchase of the Siberia-based Raspadskaya coal company but is only prepared to pay a third of the sum requested by Raspadskaya shareholders, sources familiar with the negotiations said on Tuesday.

The Raspadskaya shareholders value the company at $6 billion while Mechel is ready to pay only $1.8-2.3 billion for the miner, which has hindered negotiations, the sources said.

Raspadskaya is a good asset but is overpriced considering the difficulties, which the company is currently experiencing and which explain the shareholders' intention to sell it, three sources in the industry told RIA Novosti.

"The negotiations are proceeding with great difficulty. Raspadskaya wants a valuation of $6 billion while Mechel is unwilling to pay more than $1.8-2.3 billion," one of the sources said.

Raspadskaya, the largest producer of steelmaking coal in Russia in 2009, had to cut coal output significantly after a series of explosions hit its key mine in west Siberia in May 2010, killing 91 miners.

Mechel told RIA Novosti it was interested in Raspadskaya but had not made any price offer so far.

MOSCOW, March 29 (RIA Novosti)

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