Mechel Signs Debt Restructuring Deal with Sberbank
Russian coal and steel producer Mechel said on Monday it had agreed a debt restructuring deal with the country's biggest bank Sberbank totalling 30 billion roubles ($446 million) and $427 million.
The mining company, controlled by businessman Igor Zyuzin, borrowed heavily before Russia's economic crisis and has struggled to keep up repayments as demand for its products weakened alongside tumbling coal and steel prices.
It is now in talks to restructure $5.1 billion, about 80 percent of its total debt, with four large creditors: Sberbank, Gazprombank, VTB and a syndicate of foreign banks.
Mechel said on Monday its subsidiaries had reached an agreement with Sberbank to restructure the $427 million and 13 billion roubles of the 30 billion total.
A separate agreement regarding the remaining 17 billion roubles owed by Mechel's Chelyabinsk Metallurgical Plant is due to be completed shortly, it said.
The miner said it must now repay 2.8 billion roubles to Sberbank and its Sberbank Leasing subsidiary to complete the restructuring deal.
The grace period for Mechel's main debt could be extended until January 2020, with loans maturing in April 2022, Mechel said, but only if VTB agrees to similar conditions.
In February, Mechel reached debt restructuring agreements with major creditors after two years of negotiations. But last month, the company failed to get a quorum of 50 percent of its minority shareholders' votes to approve the deal.
Mechel's shares were up more than 3 percent on the Moscow Exchange after the settlement was announced.
(Reporting by Andrey Kuzmin and Jack Stubbs)
