Evraz has the option for early termination of a management agreement the “Sibuglemet” on the background of the problems in the coal market. This was stated by the President of Evraz Alexander Frolov. In April, the shareholders of Evraz refused to redeem VEB for this asset, considering the requested price is too high. Now, according to Mr. Frolov, and management “Sibuglemet” brings additional risks.Evraz is studying the possibility of early termination of the contract for management of the coal asset “Sibuglemet”, which is owned by VEB. “Contract management “Sibuglemet” arranged in such a way that it is possible early termination. While the debt burden is not a meaningful criterion. But the problems on the coal market is one of the arguments for which Evraz is considering the possibility of refusal of control “Sibuglemet”. But the decision has not been made yet”,— said the President of Evraz Alexander Frolov at the press-conference devoted to financial results of the holding.”Sibuglemet” is managed by Evraz in 2015. Quarterly reporting of the state Corporation asset refers to “the disposal group”, that is, the assets that the Bank intends to sell. In February of this year, “Kommersant” reported about the plans of the shareholders of Evraz in the face of Roman Abramovich, Alexander Abramov and Shvidler to buy a coal company for 4 billion rubles. in addition, they had to assume debt service of $3.5 billion In quarterly reports to VEB for the first quarter of the year, said that in the “April 2020 the previously scheduled transaction for the sale of a business “Group “Sibuglemet”” did not take place due to the refusal of a potential buyer from completing the transaction on the previously agreed terms”. In addition, the Corporation has traditionally indicated that it is taking active steps to structuring the upcoming sale. “B” sent a request to the web.”The terms on which VEB has proposed “Sibuglemet”, was for Evraz’s not very attractive,— said Mr. Frolov. We felt that it was expensive, and stand by that. No other proposals, other than those received from the Corporation in 2019, the company had received. Evraz will consider the management of “Sibuglemet”. We are not very comfortable feel in a crisis situation, when Evraz like Manager there are additional risks”.This year, the exporters of coking coal faced strong reduce the load on the steel capacity. Spot prices in the second quarter fell to $100-120 per ton, compared to $150-160 per tonne in the first quarter, and their growth in the third quarter is limited due to extremely low demand. Coal companies of Russia have begun to reduce production rates. Raspadskaya, part of Evraz, has reduced coal production in the second quarter to 28% compared to the first quarter, to 2.1 million tons. The drop compared with the second quarter of 2019 35%.Eugene Zainullin
