Page 142 - RusRPTDec20

Troubled Russian metals and mining major ​Mechel​ of Igor Zyuzin posted 25% year on year and 2% quarter on quarter decline in revenues to $870mn in 3Q20 under IFRS, ​but saw 4% q/q gain in Ebitda, and still posted adjusted net loss of $39mn. The q/q gain in earnings was supported by 18% q/q recovery in steel segment Ebitda partially on the back of increased prices for the construction product range. As reported by bne IntelliNews, in 2019 Mechel still carried over $6bn of debt (net debt/Ebitda of more than 7x) and renewed negotiations with its main creditor banks, doubting its ability to service debt in 2020. In 3Q20, weakness in the mining segment was compensated by steel segment strength, BCS Global Markets commented on November 20. However, the company still remains highly overleveraged which currently undermines its medium-term growth prospects, BCS GM analysts argue, while reiterating the Sell call on Mechel's shares. Company’s net debt excluding fines, penalties and overdue amounts went down 3% q/q and 34% y/y to $4.2bn on the back of net loan settlement with Gazprombank and VTB Bank as well as decreased debt due to the sale of companies comprising Elga Coal Complex.
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Rostekhnadzor rules out permafrost as cause of​ ​Norilsk Nickel​ fuel spill. Interfax reported. The causes of the accident at CHPP, according to preliminary data, are technical and organizational violations during construction and the operation of the destroyed reservoir. As a result of engineering and geological studies of the soil base in the collapse zone, omissions in design and shortcomings in the construction of the reservoir’s pile foundation were revealed. The accident investigation commission found that the tank, which collapsed earlier this year, resumed operations in 2019 without notifying the regulatory authorities and was carried out without proper compliance with industrial safety requirements. The final results and signing of the technical investigation will take place during the final meeting of the commission on 13 November in the Yenisei Department of Rostekhnadzor.
According to Interfax, Raspadskaya’s Board has approved the RUB 68bn deal to acquire Evraz’s 100% subsidiary Yuzhkuzbassugol. ​It also approved the price of the share buyback for those shareholders which do not agree at RUB 164/share (25% above Thursday’s close). The deal is to support the consolidation of Evraz’s coal business. As Raspadskaya is also Evraz’s subsidiary (with a 90.9% stake), we do not see a significant impact from the deal on the company’s operations or financials, and treat the news as neutral for Evraz’s stock.
Russia plans to build a metals plant in the Far East at an estimated cost of $2.2bn and supply steel sheet to the Zvezda shipbuilding yard ​as part of a push to develop the Arctic, ​Rosneft​ CEO Igor Sechin said on Wednesday, Reuters​ reported. The head of the oil producer said during a televised meeting
142 ​RUSSIA Country Report​ December 2020 www.intellinews.com