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Mechel, Gazprombank Amend Credit Facility Agreements

03/10/2010 - Mechel OAO announces prolongation of credit facilities for its subsidiaries obtained earlier from Gazprombank. According to the amendment agreements, the credit maturity extends from three years to six years.

Mechel OAO announces prolongation of credit facilities for its subsidiaries obtained earlier from Gazprombank.
 
In February 2009, Gazprombank opened credit lines totaling $1 billion for Mechel Mining’s subsidiaries. The credit facilities provided were used to finance the group’s current operations, which allowed it to repay a part of its short-term debt.
 
Mechel Mining’s subsidiaries and Gazprombank signed amendment agreements to the credit facility agreements. According to the amendment agreements, the credit maturity extends from three years to six years. The parties also have agreed to reduce both the interest rate and the security amount. Repayment of the credit body will start in three years and will be made by equal installments on a quarterly basis.
 
“Gazprombank and Mechel have strong ties through a well-established, long-standing partnership, and signing of this agreement adds more to our successful cooperation,” said Stanislav Ploschenko, Mechel’s Chief Financial Officer. “This decision has allowed us to fully stabilize the company’s financial position in terms of debt repayment structure by creating a substantial safety cushion while the financial market is still volatile. It will help us focus further solely on our investment projects, which will considerably boost the profitability of our business and enhance the company’s investment attractiveness.”
 
Mechel is one of the leading Russian mining and metals companies. Its business includes four segments: mining, steel, ferroalloy, and power. Mechel unites producers of coal, iron ore concentrate, nickel, steel, ferrochrome, ferrosilicon, rolled products, hardware, heat, and electric power. Its products are marketed domestically and internationally.