Russia’s Sberbank to initiate bankruptcy of 3 Mechel units

MOSCOW, Jul 1 (PRIME) -- Russia’s biggest lender Sberbank plans to initiate bankruptcy of three subsidiaries of debt-ridden metals and mining group Mechel, the Chelyabinsk Metallurgical Plant, Yakutugol, and Bratsk Ferroalloy Plant, the bank said Wednesday.

Mechel’s total debt to Sberbank stands at 83.6 billion rubles, including over 11.8 billion rubles of overdue debt, Sberbank said.

Mechel is not fulfilling its debt obligations and does not even make interest payments despite a low interest and has so far failed to offer restructuring terms which would be acceptable for Sberbank, the bank said.

Mechel said earlier it had reached debt restructuring agreements with Gazprombank and VTB Bank and expects to find a compromise with Sberbank by the end of the year and apply for state aid if it settles debt issues with creditors.

As of June 15, Mechel’s debt stood at U.S. $6.772 billion.

(55.8413 rubles – U.S. $1)

End