Evraz sinks to record low on cash call fears Fears of a cash call sent Evraz to a record low against a rising London market. The steelmaker partly owned by Roman Abramovich dropped 3.6 per cent to 95.6p after Merrill Lynch put a 52p target on the stock. Debt was approaching similar levels to 2009 when Evraz last sold shares and convertible bonds to ease the strain on its balance sheet, it said. Demand has been deteriorating in an oversupplied market for Russian construction steel while cash costs at Evraz's mines are above local prices, Merrill said. It forecast group net debt to reach $7.1bn by the end of the year, or 4.5 times operating earnings. Scraping its dividend meant Evraz should have enough cash to cover its $1.8bn of short-term debt but gearing of nearly five times earnings was too high while interest rates rise and profits fall, it said. Since transferring its main listing to London in November 2011, Evraz has slumped 70 per cent. The drop has cost Mr Abramovich at least £1bn with the value of his last-reported 31 per cent stake falling to £430m. Separately, Evraz said its South African subsidiary had formed a joint venture and insisted that talks to sell the business remained on track. Reports last week had suggested that the sale talks had faltered over price. Other metals companies found support on better-than-expected results overnight from Alcoa. The FTSE 100 added 1 per cent, or 63.01 points, to a one-month closing high of 6,513.08. Vedanta Resources led the blue-chip gainers, up 8.5 per cent to £10.94, after Goldman Sachs turned positive. Vedanta can still deliver earnings growth, offers a sector-leading dividend yield and should win Indian court approval shortly for a reorganisation to reduce debt, it said. Ferrexpo took on 12.2 per cent to 155.6p after reporting a sharp increase in quarterly pellet production as a new mine went into production. Royal Bank of Scotland took on 5.4 per cent to 304.4p, taking its two-day gain to 10 per cent in the wake of a muted government response to the Parliamentary Commission on Banking Standards" calls to break up the bank. Goldman Sachs saw positives in the potential separation of RBS into a good and bad bank as shedding low-return businesses would allow management to focus resources on operations with popular and political support. More importantly, the Treasury-defined hurdles to implement the separation looked achievable, it said. Based on a 51 per cent probability of the split happening eventually, Goldman set a target on RBS of 370p. Weir Group added 2.8 per cent to £21.62 on an upgrade from Morgan Stanley while sector peer Invensys rose 2.2 per cent to 437.3p as RBC reheated bid theories. "In a consolidating industry, Invensys is something of a unique asset and there are numerous potential suitors" said RBC. Emerson, Schneider Electric, Siemens and ABB were all looking for acquisitions and, in an auction, Invensys could go for more than 500p to a "strategic" buyer, it said. Talk of a short squeeze lifted Kier Group , up 8.1 per cent to £13.51. The engineeering contractor said on Monday that trading was in line with expectations. Software maker Aveva climbed 13.7 per cent to £25.78 on a reassuring trading update with demand in its main markets described as steady. Management pointed to some early signs of improvement in Brazil where there had been fears that the group was ceding market share. Henderson was up 7.5 per cent to 173.1p after the fund manager said underlying profit would beat forecasts thanks to exceptionally strong performance fees. Among the fallers, Telecity slipped 3.4 per cent to 989p after Jefferies cut the internet data centre off its "buy" list. The stock was at a premium to peers in spite of its high exposure to the London market, which may be experiencing pricing pressure, it said. Marks & Spencer lost 1.4 per cent to 453.2p after a quarterly update showed it was still losing clothing market share in spite of an improvement of its online business. With advertising to launch its new collections not due until September, investors still had six months to wait for any evidence of a turnround, said Deutsche Bank.