EDB to coordinate with state-owned Russian banks on Mechel's debt - Finogenov
MOSCOW. Oct 9 (Interfax) - The Eurasian Development Bank (EDB), a creditor of Russian mining and steel company OJSC Mechel , will coordinate with state-owned Russian banks on problems associated with Mechel's debt.
The EDB and OJSC Yakutugol, which is part of Mechel, signed a loan agreement in June 2011. The funds were mostly aimed at completing the construction of transportation infrastructure at the Elginskoye field. The loan was for the ruble equivalent of $100 million, matured in five years and was guaranteed by Mechel.
Mechel has been holding debt restructuring negotiations since the start of the year. The main creditors are VTB, Gazprombank and Sberbank , which together hold about $5.5 billion of the company's overall $8-billion debt. The creditors want to convert the debt into equity, but Mechel's principal owner and chairman Igor Zyuzin is against this. VTB and Sberbank have already taken Mechel to court in a bid to recover overdue debt. The EDB has not yet turned to the courts, however.
"The debt is being services, but not in full accordance with the loan agreement," EDB Chairman Igor Finogenov told Interfax on Thursday.
"We nonetheless proceed from the fact that there is a pool of creditors, and we will look for general approaches. We are in contact with Sberbank and VTB as concerns coordinating our efforts," he said.
Asked about prospects of a lawsuit against Mechel, Finogenov said: "A final decision will be made soon on how to proceed [and] whether an agreement will be reached."
