Russia’s Mechel reduces net debt to $9 billion in February

MOSCOW, Feb 26 (PRIME) -- The net debt of Russian metals and mining group Mechel amounted to about U.S. $9 billion in February, CFO Stanislav Ploshchenko told reporters Wednesday.

“We have not mentioned the net debt size as of the end of the year, but it was at around $9.4 billion. Now, discounting the higher U.S. dollar, which will reduce our debt portfolio, it amounts to around $9 billion after the sale of Oriel assets for $425 million,” he said.

Mechel sold the Voskhod Mining Plant in Kazakhstan and the Tikhvin Ferroalloy Plant in the Leningrad Region to Turkey’s Yildirim Group in December 2013.

Under the company’s debt repayment schedule, it has to redeem $2.034 billion in 2014 and $2.461 billion in 2015.

Ploshchenko said that after the company has repaid ruble bonds and refinanced its debt this year, Mechel will have to repay about $1 billion this year, including $500 million to VTB Bank.

“We are currently in talks to refinance this debt,” he said. “Another half billion includes small credit lines of private banks, with which we are holding refinancing talks, as well as long-term loans guaranteed by export agencies.”

The company’s asset restructuring program will help cut Mechel’s debt by at least $1 billion this year.

“In any case, if we have to start negotiations with creditors again at the year end, we will be in a better condition than in late 2013,”Ploshchenko added.

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