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"Mechel" Group transaction will be closed until the end of July

According to representatives of the Russian mining and metallurgical group «Mechel» deal, under which the sale will be carried out DEMZ (Donetsk steel plant) it must be closed no later than 31 July. Simple plant there since the beginning of the year, offering the potential buyer to acquire the company were received by management in early December last year. The amount for which is expected to sell DEMZ is 80 mln. USD, while in agreement 20 mln. USD will be transferred at the time of transition of the factory shares to the new owner, the remaining amount will be paid over 2 years from the date of sale. «Mechel» Group does not provide data on the identity of the buyer. According to statistics debt at the end of last year the company sold loans amounted to 81.1 million. USD.

Donetsk Electrometallurgical DEMZ company that bears the name until 2009 MMW «ISTIL (Ukraine)», was founded in 1999 in the process of restructuring on the basis of drop-hammer, crimping and electric steel plant areas Donetsk. The specificity of the enterprise is the production of square pipe and continuously cast billets, hot-rolled round a large diameter.

As reported previously granted Donetsk the company suspended work after 4 months, 01/16/2014, the cause of which was the lack of scrap metal in the enterprise storage, representative of the plant at the same time it was stated that further work will be possible not earlier than the spring of this year. Previous stop production processes carried out in 2012 — then the reason was the high price of scrap metal. Enterprise Work then resumed in September last year.

Attempts to sell the loss-making enterprises is carried out group «Mechel» from the autumn of 2012. In the late summer of last year the leadership of the group was signed an agreement with the Russian businessman Vadim Varshavsky regarding the sale DEMZ. The transaction amount was 2 thousand EURO upon payment of the debt by the buyer of the plant, which is 81 million. USD.

For the group itself «Mechel» in 2013 was not an easy one: for this period, net loss amounted to USD 3 billion as a result of write-downs following the sale of companies required to repay the debt.

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