The start of the bankruptcy of Estar’s subsidiaries is a quite positive event for Mechel

Airat Khalikov, the analyst of Veles Capital:

Yesterday, the Volgograd plant of small-diameter pipes and the Engelsk pipe plant, which are parts of the Estar group, filed applications on their bankruptcy to thecourts.

One of the main fears of investors in 2012-2013 concerning Mechel was the fear that the company could put on the books the debts of the Estar’s subsidiaries, whose shares were received by Mechel, when Estar proved to be unable to repay a loan. As of end of 2012, the total debt of Estar made up $731 million – the recognition of such large debt would threaten Mechel by significant deterioration of credit indices.

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