Russia’s Sberbank ready to delay Mechel’s debt payment to 2022

MOSCOW, Apr 19 (PRIME) -- Russia’s top lender Sberbank is ready to delay the redemption of debt of debt-ridden metals and mining group Mechel until April 2022 if the company provides safe collateral and services the debt and interest on time, a Sberbank spokesperson told PRIME late on Monday.

Mechel said that amicable deals with the bank include a deferment in repaying the principal debt from April 2017 until January with a subsequent repayment until April 2022, if the same terms are agreed with VTB Bank and some suspensive conditions are fulfilled in 2016, the company said.

“We are talking about provision of a coordinated collateral for Mechel’s liabilities that are to be restructured, which has to be approved by the major part of minority shareholders of Mechel and companies of the group. The bank will change the redemption schedule to 2022 if the conditions are fulfilled and the company services the debt on time,” Sberbank’s representative said.

Amicable agreements on restructuring debts amounting to around 30 billion rubles and U.S. $427 million between Mechel and Sberbank have been already approved by court. 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.

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 the debt restructuring is scheduled for May 26.

(68.2724 rubles – U.S. $1)

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