Russia's Mechel places 5 bln rubles in fourth-series bonds
MOSCOW. July 31 (Interfax) - Russia's Mechel coal and steel group has fully placed 5 billion rubles in fourth-series bonds, the company said in a statement.
The rate of the first coupon was set at 19% annually at the placement on Thursday.
The 5 million 1,000-ruble bonds are being sold in a public subscription on MICEX Stock Exchange.
The bonds will circulate for seven years. They bear quarterly coupons.
Mechel has announced a three-year offer to purchase the bonds.
Sberbank Russia has been appointed the underwriter of the issue.
It was reported earlier that the proceeds from the placement of infrastructure bonds will be used to build the rail line from the Elga coal field.
The FFMS registered nine issues of Mechel bonds, each totaling 5 billion rubles, in May. The fourth and ninth issues are for seven years, the fifth and tenth for nine years, the eighth, eleventh and twelfth for 10 years and the sixth and seventh for eight years.
Yakutugol Holding Company is the guarantor.
Mechel began building a rail line to the Elga field in February 2009. The 315-km rail line was to enter operation no later than September 30, 2010. The project will cost about $1.3 billion.
Mechel ran into difficulties financing the project in September 2008, resulting in 2.6 billion rubles in indebtedness to the general contractor as of April.
Mechel has consolidated controlling shares in coal and steel companies and a number of ports. Igor Zyuzin, the chief executive, is the group's main beneficiary. The free float is around 25%.