VTB insists on Mechel debt conversion into equity - Kostin
SOCHI. Sept 19 (Interfax) - VTB insists that the Mechel coal and steel group's debt be converted into equity, the bank's chief, Andrei Kostin, told reporters on the sidelines of the investment conference in Sochi.
"If the company is unable to bear its debt burden, the only and most rational means would be to convert the debt into equity, which would not in fact be all that good for the bank. But we are prepared for this because we don't currently see how the debt burden might be serviced. We've suggested this option, but it hasn't yet received support," Kostin said.
"If this does not [occur], we do not have any other choice but to take measures of a legal nature in terms of filing a suit since Mechel's proposed plan does not suit us. It does not resolve the main problem. No matter how much debt you restructure, this burden is crippling in our opinion," he said.
Kostin added that the government was not currently going to help companies that 'took too much money.' "I think that the situation will be a mirror image of what it was in 2008. This issue must be resolved by creditors and the borrow. We have the exact same position as Sberbank ; we are continuously coordinating [on this]," he said.
VTB has been forced to increase expenses on the loan to Mechel because of outstanding debt, Kostin said.