(Updates with Evraz CEO comment from third paragraph.)
Oct. 6 (Bloomberg) -- Evraz Group SA, Russia’s largest steelmaker by output, said it ended talks on the potential sale of its 40 percent stake in coal producer OAO Raspadskaya “due to high market volatility.”
Raspadskaya, which before today had slumped 66 percent in Moscow trading since January, had its biggest intraday gain in almost a year. The company’s management has no plan to sell its 40 percent stake.
“Raspadskaya is a good quality asset and one of the best coking coal producers in Russia,” Evraz’s Chief Executive Officer Alexander Frolov said in a statement.
Evraz said in March it was considering its options over the stake. Evraz and Raspadskaya’s management were seeking to sell their combined 80 percent stake in the Kemerovo, Siberia-based company and had hired Deutsche Bank AG and Morgan Stanley to find a buyer, people familiar with the plan said at the time.
The prospect of the stake being sold in the next 12 to 18 months is “low,” Frolov said, though this possibility can’t be ruled out in the “long-term.”
Evraz fully supports the managing shareholders of the coal producer in their “implementation of the Raspadskaya mine restoration programme,” the CEO said, referring to an accident at a Siberian mine last year that halted output for half a year.
The management of the Russian coal producer isn’t planning to sell its 40 percent stake in the company, company spokesman Alexander Andreev said in an e-mailed statement.
Raspadskaya said last week that first-half profit fell 57 percent from a year earlier as output hadn’t recovered since since a series of explosions and fires at the Siberian mine last year that killed 90 people.
Raspadskaya’s CEO Gennady Kozovoy said today in a separate statement that he will remain in his post.
The shares jumped as much as 13 percent today and traded at 80.93 rubles as of 11:30 a.m. in Moscow.
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