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. Last Updated: 07/27/2016

State Tenders 25.5% Stakes In 2 Kemerovo Coal Mines

Russia is selling stakes in two coal mine holding companies in the Kemerovo region, its most important coal-mining region, through investment tenders, the Federal Property Fund said Tuesday in its latest bulletin.


Bids for 25.5 percent stakes in Kontsern Kuzbassrazrezugol and Ugolnaya Kompaniya Yuzhny Kuzbass will close Nov. 28, with tenders taking place Dec. 4.


The starting price for the stake in Kuzbassrazrezugol, whose assets include large holdings in two of Russia's biggest mines, Razrez Krasny Brod and Razrez Yerunakovsky, is 90.1 billion rubles ($15 million).


The winner of the tender will have to pay 50 billion rubles to settle the company's tax arrears and pay off tax arrears of its subsidiaries. The group's liabilities include 688 billion rubles in tax arrears owed to the federal government.


The starting price for the stake in Yuzhny Kuzbass is 26.99 billion rubles. The winner will have to pay 15 billion rubles to settle the company's tax arrears and also pay off arrears of its subsidiaries.


The group's tax arrears total 1.87 billion rubles.


The Kemerovo region's steel and chemical plants powered by high-quality local coal made it one of the richest parts of the Soviet Union.


But the industry is now suffering from the widespread Russian problem of unpaid bills and wages, while the rise in transport costs has made it unprofitable to ship coal out of the region.