Mechel sees no problem in paying off $2.7 bln in debt next year
MOSCOW. Dec 16 (Interfax) - Mechel Group sees no problems in paying off $2.66 billion in debt next year, the company said in its debt payment schedule for 2012-2016.
"Around $1.1 billion of this amount is in renewable loan facilities while $369 million is bond borrowing, which might be refinanced through tying the coupon rate to the market," Mechel's vice president for finances, Stanislav Ploshchenko, said during a conference call on Thursday.
"Therefore, we will have only $1.2 billion to pay off. We also have a safety cushion. If money is placed in accounts and unselected loan facilities, it then only comes to $2.1 billion at present," he said.
He did not rule out that the company might exceed its net debt to EBITDA covenant which now comes to 3.5. However, he noted that Mechel should "be able to reach an agreement on changing the covenant's level".
Mechel reached an agreement with banks in the first half of this year to change the debt covenant. The company's net debt to EBITDA rate was increased from 3 to 3.5 for end of 2011.
The changes in the covenant might be reflected in the appreciation on costs to service the debt and restrictions on investment, Ploshchenko said.
The main beneficiary in OJSC Mechel is its board chairman, Igor Zyuzin. The company's free float comes to around 30%.