UPDATE: Russia’s Mechel may avoid bankruptcy with debt repayment plan

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MOSCOW/GORKI, Moscow Region, Mar 11 (PRIME) -- Russian metals and mining group Mechel may still avoid bankruptcy if the company offers a real debt settlement plan to its creditors, Andrei Kostin, CEO of the country’s second largest bank VTB Bank, said in an interview with Bloomberg released on Wednesday.

VTB needs a real program aimed at gradually redeeming the debt and not just a five- to 10- year delay with no obvious sources of financing or any progress in the situation, Kostin said.

Kostin said that there is still a possibility to settle the situation with Mechel’s debt and he plans to meet with the company’s main owner Igor Zyuzin in the week starting from March 16 to discuss the issue. The sides have made no agreements yet, he added.

The Russian government is monitoring the dialogue between Mechel and VTB, Industry and Trade Minister Denis Manturov told reporters, adding that he hopes that the sides will come to an agreement. “We will closely watch these talks in order to decide on employment issues on time in the first place,” he said.

Mechel has been in debt restructuring talks with its core creditors – Sberbank, Gazprombank and VTB, for several months. On February 24, Mechel said it plans to ask the government for help under an anti-crisis plan, while on March 7, VTB notified other creditors that it is going to file a bankruptcy suit against the company.

VTB also planned to get a stake in Mechel in exchange for a debt write-off until June, CFO Herbert Moos said January 22.

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