Bloomberg quoted three people with knowledge of the matter said OAO Mechel Russia largest producer of coking coal has delayed a plan to raise as much as USD 2 billion selling shares in a mining unit.

The people said asking not to be identified as the information is private that Mechel has notified the banks hired to manage the initial public offering. The Moscow based company cited unfavorable market conditions for its decision.

The IPO would have been the largest in Russia metals and mining industry this year. It’s the biggest sale to be delayed since May when thermal coal producer OAO Siberian Coal Energy Co put off a decision on a USD 1.5 billion IPO and OAO Severstal gold unit Nord Gold NV postponed a similar-sized deal it was planning. Mechel press-office declined to comment.

They said Mechel proposed selling a stake of 10% to 15% of OAO Mechel Mining as early as this year in London or Hong Kong, two people familiar with the process said in July. The company picked JPMorgan Chase & Co, Morgan Stanley and UBS AG to manage the IPO. The sale was intended to generate USD 1.5 billion to USD 2 billion.

Mr George Buzhenitsa a Deutsche Bank AG analyst said “The Company went half-way with this IPO and technically will be able to restart the process at any moment when the markets improve.”

Mechel joins at least seven Russian companies that have pushed back plans or decisions on share sales. They include ChelPipe, cell phone retailer Euroset Holding NV, steel and mining company OAO Koks, OAO Russian Helicopters and UTH Russia television network.

The last Russian company to complete an IPO was OAO Phosagro, which raised USD 538 million from investors on July 13 excluding the value of additional shares available to banks.

(Sourced from Bloomberg)