Russia's Mechel to buy U.S. Bluestone Coal- paper

MOSCOW, Feb 26 (Reuters) - Russian miner Mechel has agreed to buy U.S. privately-owned Bluestone Coal Corp for $425 million plus shares, having agreed a $4 billion cash deal last year, a newspaper reported on Thursday.

Vedomosti business daily quoted sources present at Wednesday's meeting of Mechel's top management and investment bankers in London as saying that Mechel will buy 100 percent of the U.S. firm from the James Justice family which owns it.

Under the deal, Mechel, Russia's largest producer of coal for the steel industry, will pay $425 million and issue preferred shares equivalent to 15 percent of its charter capital.

Mechel has paid the Justice family $424 million as a deposit, said the paper.

Mechel was not immediately available for comment.

The New York-traded company, controlled by billionaire Igor Zyuzin, postponed in August a preferred share offering indefinitely when its stock was hit by market's downturn and government criticism.

It had planned to place of 55 million preferred shares, or 11.7 percent of its charter capital, through which it had hoped to raise over $2.5 billion.

(Reporting by Tanya Mosolova, Editing by Alfred Kueppers, John Stonestreet) Keywords: MECHEL BLUESTONE/ ([e-mail]; [phone]; Reuters Messaging: [e-mail]) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.