Advised Mechel Group on the sale of the Elga coal project

Advised Mechel Group on the sale of the Elga coal project

22 April 2020

ALRUD experts successfully represented Mechel Group in 2020 on the sale of its 51% participatory interest in the companies which operate the Elga coalfield project: Elgaugol, Elga Doroga and Mechel Trans Vostok, being one of the world’s largest deposits of high-quality coking coal with estimated reserves of approx. 2.2bn tons.

The Elga project has been acquired by A-Property; the total value of the deal is RUB 89bn.

The transaction had a complex structure, as it involved a simultaneous sale of participatory interests in three Russian companies, restructuring of the companies’ existing indebtedness to the major creditors: top Russian banks – Gazprombank, VTB and VEB.RF, and discharge of existing encumbrances over the companies’ assets and participatory interests.

2020 deal is a second step of Mechel Group exit from Elga project starting from 2016, when ALRUD assisted Mechel Group on the sale of its 49% stake in these companies to Gazprombank.

ALRUD experts, working on the project under the leadership of Partners Andrey Zharskiy (Partner and Head of the Energy, Natural Resources and Infrastructure Industry Group) and Alexander Zharskiy (Head of Corporate and M&A Practice), comprised Counsel Oleg Ezhov, Associate Kristina Akalovich, Senior Attorney Anna Kuznetsova and Attorney Irina Cherdintseva.

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