UPDATE: Exec: Russia’s VTB, other banks may develop Mechel’s assets

(Adds details in fourth, fifth paragraphs)

DAVOS, Switzerland, Jan 21 (PRIME) -- Russia’s second biggest bank VTB, together with other state-run banks Sberbank, Gazprombank and Vnesheconombank (VEB), will work on development of assets of debt-ridden metals and mining group Mechel, including the Elga coal deposit, VTB Deputy CEO Yury Solovyov told reporters Thursday.

“Now the issue is long-term cooperation with the company. We are now looking at several large projects for them. First, this is the Elga project and how we should finance it with the help from VEB, what we should do with the railroad, how we should form the Elga’s complex correctly, how we should attract a strategic investor” and other issues, he said.

“The work in this direction has only begun. We hope to cooperate with Gazprombank, VEB, and Sberbank actively. Everyone is in a constructive mood because the company should have a rather high cost in the global sense and in the long run,” he said.

VEB CEO Vladimir Dmitriyev said that the bank will not reduce investment in Elga, although he did not discuss this with the other banks.

A new tranche of Elga development financing will be disbursed only after suspensive conditions are met, he said without elaborating.

In September 2015, Mechel signed a deal to restructure a 70 billion ruble debt to VTB, including the principal debt deadline delay until April 2017 with monthly interest payments until April 2020.

(79.4614 rubles – U.S. $1)

End