Russian miner OAO Mechel (MTL) may receive state support in the form of tax breaks and the purchase of its bonds by state banks, daily Vedomosti reports Thursday, citing a document from a government meeting.
At a meeting with executives from the Russian mining industry Aug. 21, Prime Minister Vladimir Putin told state banks OAO Sberbank (SBER.RS), VTB Bank (VTBR.RS), Gazprombank and Vneshekonombank, or VEB, to look into buying 10 billion rubles ($312.8 million) worth of bonds issued by Mechel before the end of the year, the document obtained by Vedomosti says.
Additionally, the banks may secure another RUB30 billion worth of Mechel bonds.
The indebted company plans to use the funds to develop the Elga deposit in the Yakutia region. The government may also grant Mechel tax breaks for the field and for other projects in Eastern Siberia and the Far East, Vedomosti said.
When Putin met with metals executives last summer, he said coke producers were charging too much, singling out mining company