Russian govt plans Mechel bond issue, not bankruptcy

MOSCOW, Jun 26 (PRIME) – The Russian government does not plan to declare debt laden metals and mining group Mechel bankrupt, but intends to support the company with a bond issue for its creditors, Industry and Trade Minister Denis Manturov said in a news conference on Thursday.

“At the meetings where I and my colleagues attended, the possibility (of bankruptcy) was not discussed … The more realistic option on the agenda is Mechel’s bond issue, which will be bought by the banks. I think it is the most appropriate option,” Manturov said.

The final version of Mechel’s support program will be developed by all relevant parties and presented to Prime Minister Dmitry Medvedev next week.

Mechel’s total debt amounts to U.S. $8.3 billion.

On June 17, business daily Kommersant reported citing its sources that Russian state banks Gazprombank, VTB and Sberbank will provide the company with a 215 billion ruble loan to help it repay its debt, but on Thursday VTB said it will not give Mechel any new money.

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