Bankruptcy of Russian Mining Giant Mechel 'Inevitable' - Economy Minister

The looming bankruptcy of mining company Mechel was unavoidable, Russian Economy Minister Alexei Ulyukayev said.

SHARM EL-SHEIKH (Sputnik) — Russian Economy Minister Alexei Ulyukayev reiterated on Friday that the looming bankruptcy of mining company Mechel was unavoidable.

Speaking during his working visit to Egypt, Ulyukayev told reporters that all attempts to restructure the company's debt or find other solutions to bail out the biggest producer of coal used for steel-making had failed.

"Unfortunately, the recent developments clearly show that no other options [but bankruptcy] are left," Ulyukayev said.

Mechel lost more than 75 percent of its market value last year as it struggles to repay the remaining debt in excess of $6 billion to lenders, including Russia's state-run VTB and Sberbank.

Mechel, founded in 2003, is one of the world’s leading mining and metals companies, which has production facilities in 11 Russian regions. The company, which produces coal, iron, ore, electric power and other products, has around 80,000 employees.

Mechel’s stock first dropped sharply in 2013 by almost 60 percent. Mechel’s debt then reached almost $10 billion, and the company started delaying its payments to lenders, employees and suppliers, getting to a deeper financial trouble.