Russian tycoon buys 49% stake in Elga coal project

Russian businessman Albert Avdolyan has reached an agreement to buy a 49% stake in the major Elga coal project in Russia from Russian lender Gazprombank, the bank said in a statement on Monday.

Avdolyan's company A-Property is still in talks to buy the remaining 51% in the project from Russian steel and coal producer Mechel. For Mechel, Elga is the biggest growth asset, but it confirmed last week that it was in talks to sell it to reduce the debt burden.

Elga, one of the world's biggest coking coal deposits, requires further investments to develop. Mechel's net debt stood at 400 billion rubles ($5 billion) at the end of 2019, mainly to Gazprombank and another bank, VTB.

The businessman may reach an agreement with Mechel by the end of April and become the owner of 100% in the project, two sources familiar with talks revealed on Monday.

Mechel is in debt restructuring talks with its creditors, and these discussions directly depend on the result of its Elga negotiations, Mechel said last week.

.Asian Metal Copyright Mechel's net debt stood at 400 billion rubles $5 billion at the end of 2019, mainly to Gazprombank and another bank, VTB.Asian Metal Copyright