PRESS: Russia’s Mechel to repay interest, all penalties to VTB

MOSCOW, Mar 19 (PRIME) -- The owner of Russian metals holding Mechel Igor Zyuzin agreed to repay interest and penalties for loan servicing delays to VTB after negotiations with the bank Tuesday, where it threatened to file for the company’s bankruptcy to court, business daily Vedomosti reported Thursday, citing sources close to the negotiations.

On Wednesday, a spokesman for VTB told PRIME that after a year of unsuccessful debt restructuring talks and threats to file for Mechel’s bankruptcy, Mechel proposed good debt settlement conditions.

Earlier, VTB wanted a stake in the company in exchange for a debt write-off, while Industry and Trade Minister Denis Manturov and Mechel said that it will repay the whole debt. CEO Oleg Korzhov said that one or one and a half year grace period for repayment is enough.

Mechel will fully repay a 44 billion ruble loan, 4.5 billion ruble interest and penalties it owes to the bank but the company and the bank have not set a deadline for this yet, one of the sources told Vedomosti. The repayment of the body of the loan was earlier scheduled to start April 20, 2015, while Mechel has not paid interest since July 2014, the newspaper reported.

A source close to VTB said that the bank may reduce the interest rate to the key rate plus 2-3%.

(61.3483 rubles – U.S. $1)

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