Russian businessman Albert Avdolyan has reached an agreement to buy a 49% stake in the Elga coal project in Russia from Gazprombank, the bank said. Avdolyan’s company A-Property is still in talks to buy the remaining 51% in the project from Russian steel and coal producer Mechel, as reported by Reuters. For Mechel, Elga is the biggest growth asset, but it confirmed 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.
Avdolyan may reach an agreement with Mechel by the end of April and take control of the entire project, two sources familiar with talks told Reuters on Monday.