UPDATE: Russia’s Mechel signs 70 bln rbl rescheduling deal with VTB Bank

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MOSCOW, Sep 9 (PRIME) -- Russia’s debt-ridden metals and mining group Mechel has signed a deal with VTB Bank to reschedule a 70 billion ruble debt, Mechel said in a statement on Wednesday.

“Credit agreements envisage a delay of the principal debt’s redemption until April 2017 with a further monthly redemption until April 2020,” the company said.

Mechel and its units Southern Kuzbass Coal Company, coal company Yakutugol and Chelyabinsk Metallurgical Plant act as borrowers under the credit lines.

Under the deal, the bank and the company will abstain from all legal disputes, a representative for Mechel told PRIME. “The agreements envisage suspension of all legal disputes by abandoning existing claims, filed complaints or in another way coordinated by the sides,” the representative said.

As of June 15, Mechel’s debt stood at U.S. $6.772 billion. The company said earlier it owed around $2.3 billion to Gazprombank, $1.8 billion to VTB Bank, and $1.3 billion to Sberbank.

On August 31, the company said it signed agreements to restructure $1.4 billion and 33.7 billion rubles of debt to Gazprombank, delaying the repayment of the principal debt until April 2017 with a subsequent monthly repayment until April 2020. Interest rates exceeding 8.75% annually were capitalized.

Mechel is still in debt restructuring talks with Sberbank.

(68.7932 rubles – U.S. $1)

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