Russian Coal and Steel Producer Refinances Nearly US$2 Billion in Debt
09/01/2015 - Russian mining and metals company Mechel OAO has restructured nearly US$2 billion worth of loans with Gazprombank, the company has announced.
"We are deeply grateful to Gazprombank for its support of our company which found itself in a difficult financial situation as the Group's key financial payments coincided with the most serious slump commodity markets have seen in a decade," said Igor Zyuzin, Mechel OAO's board chairman, in a statement.
"The restructuring enables us to bring our key investment projects to full capacity, which will ensure our financial stability and serve as source for repayment of our debt in 2017-2020," he said.
Under the terms, the company will have a grace period on the principal until April 2017, when it will begin making monthly repayments until April 2020. Interest payments exceeding 8.75 percent will be capitalized, the company said.
The loan agreements are pending approval by shareholders and the boards at Mechel and its subsidiaries.
The loans are among the $6.7 billion in debt that the company has been struggling to pay down following the collapse of coking coal prices, according to BloombergBusiness. The news service said the company has made several proposals to creditors to alter terms.
Mechel’s steel segment produced more the 4.2 million metric tons of steel and about 4 million metric tons of pig iron in 2014.
"The restructuring enables us to bring our key investment projects to full capacity, which will ensure our financial stability and serve as source for repayment of our debt in 2017-2020," he said.
Under the terms, the company will have a grace period on the principal until April 2017, when it will begin making monthly repayments until April 2020. Interest payments exceeding 8.75 percent will be capitalized, the company said.
The loan agreements are pending approval by shareholders and the boards at Mechel and its subsidiaries.
The loans are among the $6.7 billion in debt that the company has been struggling to pay down following the collapse of coking coal prices, according to BloombergBusiness. The news service said the company has made several proposals to creditors to alter terms.
Mechel’s steel segment produced more the 4.2 million metric tons of steel and about 4 million metric tons of pig iron in 2014.
