UPDATE 3: CEO: Russia’s Mechel has to redeem $100 mln debt in 2017

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MOSCOW, Jun 30 (PRIME) -- Russian metals producer Mechel will have to repay U.S. $100 million of debt in 2017, CEO Oleg Korzhov said at an annual shareholder meeting on Thursday.

“Next year, due debt will amount to about $100 million. We plan to repay it with our own money,” Korzhov said.

Mechel has agreed with Gazprombank and Sberbank to postpone the principal debt redemption to 2020. The company plans to reach the same agreement with VTB in July as the companies have already agreed on it in general, Korzhov said.

The net debt of the company amounts to 400 billion rubles after a sale of 49% in the Elga coal field to Gazprombank, the CEO said.

“Yesterday, we closed a deal to sell a stake in the Elga field, so, according with the latest data, the net debt of the company is about 400 billion rubles,” he said.

Mechel has paid 2.8 billion rubles of interest to Sberbank after the Elga stake sale, Korzhov said. “Some of this money went to repayment of debt amounting to 31.5 billion rubles, and interest of 2.8 billion rubles was fully paid to Sberbank,” he said.

Korzhov said that Mechel has become profitable lately. “Monthly operating profit of the company is 4–5 billion rubles.”

Mechel hopes that the government will soon decide in favor of a financial support of the Elga and the Port of Posyet projects, Korzhov said. “The government was earlier unable to provide a financial support to facilities of the company. By now, the restructuring of debts to banks has almost ended.”

The company will discuss dividend payments with its creditors, Korzhov also said.

(64.2575 rubles – U.S. $1)

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