Mechel rounds off rescheduling with state banks with deal to defer VTB debt to April 2022
MOSCOW. Dec 26 (Interfax) - Mechel has signed an agreement rescheduling repayment of the debt it owes to VTB to April 2022, the coal and steel group said in a statement.
The document, a supplement to the existing loan agreement, was signed on December 23.
"According to the signed agreements totaling 70.2 billion rubles, payments on the debt was extended until first quarter of 2020 with repayment by the first quarter of 2022. Simultaneously conditions of the trade financing, with outstanding balance of 45 million euros, were also renegotiated and the deal was extended until April 2022," Mechel said.
VTB is one of Mechel's three biggest creditors, alongside Sberbank of Russia and Gazprombank . Mechel's net debt totaled 479.148 billion rubles as of the end of September.
"Signing of the agreements with VTB Bank means that similar conditions on debt repayment that we made with Gazprombank and Sberbank will now come into force. So we can say that the extensive restructuring process with Russian state banks, which hold 67% of Mechel's debt, is complete. This restructuring will enable the company to stabilize its financial position and focus on operational efficiency. We hope that this will also speed up restructuring agreement with our international lenders. Considering the positive trends on commodity markets and the additional cash flow from our implemented investment projects, we will make every effort to begin repaying our debt early, to decrease the company's debts," Mechel CEO Oleg Korzhov was quoted as saying.
Mechel chief Oleg Korzhov said in June that the company had already signed agreements with Gazprombank and Sberbank to reschedule the start of principal repayment to Q1 2020, with repayment to be completed in 2022. In order for those agreements to enter force, Mechel needed to conclude analogous agreements with the third creditor, VTB. Mechel expected to sign such an agreement in July, but it later emerged that VTB was negotiating with Mechel over additional terms.
The Mechel group holds controlling stakes in steel, coal mining and energy companies, as well as commercial ports. Igor Zyuzin and his family are Mechel's principal beneficiaries with 55.04% of shares, according to the latest information.