Russia’s Mechel agrees 1-yr delay in payments under $1 bln loan

MOSCOW, Dec 3 (PRIME) -- Russian metals and mining group Mechel has agreed to extend the grace period and maturity of its U.S. $1 billion syndicated facility to the end of 2014 and 2016 respectively, the company said Tuesday.

The deal was coordinated by ING Bank, Societe Generale and VTB Capital.

The borrowers under the agreement include Mechel’s main companies in the mining division, namely Yakutugol and Southern Kuzbass Coal Company.

“The agreement will provide Mechel with a more stable financial environment, allowing us to continue our financial strategy of extending the maturity profile of our debt portfolio and reducing leverage through the disposal of non-core assets,” CFO Stanislav Ploshchenko said. He also said that the agreement will enable Mechel to successfully pass the commodity price depression.

“Additionally, it will greatly ease the pressure on Mechel’s cashflow over the next 12 months, moving around $600 million of repayments from 2013-2014 to 2015-2016,” Ploschenko added.

End