Mechel seeks permission from creditors to pay preferred dividends
MOSCOW. May 31 (Interfax) - Mechel has asked its creditor banks for permission to pay dividends for 2016 on preferred shares, CEO Oleg Korzhov said during a conference call.
The banks haven't responded yet, he said.
Mechel shareholders would also have to approve the dividends.
Under the company's charter, 20% of IFRS net profit is to be paid as dividends on preferred shares. Mechel posted an IFRS net profit in 2016 - 7.1 billion rubles - for the first time in several years. Accordingly, it should pay 1.4 billion rubles or 10.23 rubles per preferred share in dividends.
However, Mechel's debt restructuring deal with creditors restricts its ability to pay dividends.
The Mechel board of directors has yet to make a recommendation concerning allocation of the 2016 net profit. But Mechel is not ruling out payment of dividends on preferred shares and will discuss the issue with shareholders and creditors, Korzhov said previously in an interview with Interfax.