Econ minister: No way to avoid Russia’s Mechel’s bankruptcy

SHARM EL-SHEIKH, Egypt/MOSCOW, Mar 16 (PRIME) -- Bankruptcy of Russian debt-ridden metals and mining group Mechel cannot be avoided, Economic Development Minister Alexei Ulyukayev told reporters late March 13.

“I did not say that it would be reasonable to declare Mechel bankrupt, I said that it seems that there is no other option, that we are looking at other options and there is none. Unfortunately, the situation shows that there is no other possibility,” Ulyukayev said.

“If Mechel prepares documents for an anti-crisis commission, we will consider them. No company has yet filed the documents.”

VTB Bank, one of Mechel’s main creditors, thinks that the company could redeem more debt, CEO Andrei Kostin said separately in an interview to Rossiya 24 TV channel. “We think that the borrower can redeem more than it does even under the current circumstances. And it does so when he sees serious pressure from creditors,” he said.

Kostin will meet with Igor Zyuzin, Mechel’s core owner, in the week starting from Monday and discuss possibilities for the dispute settlement, he said, adding that there are such possibilities. VTB still insists on the company passing control over it to creditors. “We do not see a reasonable management.”

However, the bank may still file a bankruptcy suit against the company, he added.

Mechel has been in debt restructuring talks with its core creditors – Sberbank, Gazprombank and VTB, for several months. On February 24, Mechel said it plans to ask the government for help under an anti-crisis plan, while on March 7, VTB notified other creditors that it is going to file a bankruptcy suit against the company.

VTB also planned to get a stake in Mechel in exchange for a debt write-off until June, CFO Herbert Moos said January 22.

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