Russia Mechel hopes to write off 20 bln rbl of penalties in 2016

MOSCOW, May 13 (PRIME) -- Russian metals and mining group Mechel expects to write off up to 20 billion rubles of penalty interests and fines on debts in 2016, Andrei Slivchenko, the company’s vice president for finance, said Friday in a conference call.

“Penalty interests and fines stood at about 20 billion rubles as of late 2015. The write-off depends on our fulfillment of restructuring conditions, including redemption of existing debts under the current schedules. We plan to fulfill these conditions in 2016–2017 and hope that these penalties will be written off this year,” he said.

Earlier, Mechel said it reached amicable debt restructuring deals with Sberbank amounting to around 30 billion rubles and U.S. $427 million. Previously, Sberbank closed a deal to cede 31.5 billion rubles of Mechel’s debts to Gazprombank, while the company provided the bank with an option to buy 49% in the Elga coal project for 34.3 billion rubles.

The agreements envisage a possibility of a delay of the principal debt’s redemption to January 2020 from April 2017 with further redemption until April 2022 if the company reaches similar agreements with its other creditor VTB Bank and fulfills suspensive conditions during 2016.

Mechel is restructuring $5.1 billion out of its $6.2 billion total debt, including $1.267 billion of debts to Sberbank, $1.8 billion of debts to Gazprombank, about $1 billion of debts to VTB, and $1 billion of debts to a syndicate of foreign banks. An extraordinary meeting of the company’s shareholders on debt restructuring is scheduled for May 26.

(64.9607 rubles – U.S. $1)

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