NEW YORK (TheStreet) -- Russian miner Mechel (MTL) dropped 19.5% to $2.31 in trading Wednesday, a knock-on effect of the stock's 41% dive on the Moscow Exchange overnight. Investors remain concerned over the company's management of $9 billion in debt.
Year to date, shares have plummeted 66.7%, after sluggish Chinese growth and financial turmoil in Europe weakened demand for Mechel's core coking coal production.
In an emailed statement, Mechel said discussions with its creditors were progressing smoothly and that the share price slump was due to rumors run rife.
"Discussions with banks over covenant holidays and debt restructuring are going well," the company said in a statement obtained by Reuters. "There are no negative events at the company."
The miner expects debt discussions to be finalized by the end of November.
At the time of publishing, a Mechel spokesperson had not responded to requests for comment on its debt discussions.
TheStreet Ratings team rates Mechel OAO as a Sell with a ratings score of D. The team has this to say about its recommendation:
"We rate Mechel OAO (MTL) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, poor profit margins and weak operating cash flow."