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Mechel Completes Placement of 05 Series Bonds
10/22/2009 - Mechel OAO announced completion of its placement of non-convertible interest-bearing 05 series documentary bonds for a total value of 5 billion rubles.
Mechel OAO announced completion of its placement of non-convertible interest-bearing 05 series documentary bonds for a total value of 5 billion rubles. Proceeds will help to support the company’s development of its Elga coal mine.
“We are satisfied with placement results,” commented Stanislav Ploschenko, Mechel’s CFO. “High demand for our bonds and trends for reduction of borrowing cost provide Russian companies with further opportunities to overcome the downturn manifestations for a transition to investment-driven growth stage.
Securities were offered in the amount of 5 million, with each bond holding a nominal value of 1000 rubles. The coupon rate for the first coupon period is set at 12.5% per annum. The bonds will mature on October 9, 2018.
VTB Capital, Gazprombank and Sberbank acted as arrangers for the placement, Uglemetbank being its lead co-arranger.
“Russian capital market potential allowed for cost-efficient fundraising for Elga coal mine development,” added Ploschenko. “We hope as well financial institutions will regard the outcome as a price guidepost in respect of long-term unsecured debt of the company”.
Mechel acquired the Elga coal mine in 2007, and has been working this year to construct a railway spur for better access to the facility.
Mechel acquired the Elga coal mine in 2007, and has been working this year to construct a railway spur for better access to the facility.
Mechel, one of Russia’s leading companies, unites producers of coal, iron ore concentrate, steel, rolled products, nickel and ferroalloys, hardware, heat and electric power. Its business includes four segments — mining, steel, ferroalloy and power — and its products are marketed domestically and internationally.
