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Mechel Obtains Credit Lines from VTB Bank

12/08/2008 - VTB Bank provides Mechel OAO with credit lines totaling approximately US$560 million for its subsidiaries Yakutugol OJSHC, Southern Kuzbass Coal and CMK.

VTB Bank has provided Mechel OAO with credit lines in the amount of 15 billion rubles (approximately US$560 million).
 
Mechel said that VTB Bank had opened one-year credit lines totaling 15 billion rubles for Yakutugol OJSHC, Southern Kuzbass Coal Co. OAO and CMK OAO, all subsidiaries of Mechel. The company said the credit facilities would be used to fund the operations of these subsidiaries.
 
Establishment of the credit line is a continuation of the ongoing relationship between Mechel and VTB Bank, which supported Mechel’s acquisition of Yakutugol OJSHC and Elgaugol OAO stocks at auction in the autumn of 2007. That transaction was financed with Mechel's own capital and capital provided mainly by VTB Bank.
 
The strong relationship between Mechel and VTB Bank is also substantiated by the Agreement on Long-term Mutually Beneficial Cooperation the companies entered into in April 2008, with a view of implementing Mechel's projects and development plans, as previously announced.
 
As part of the newest agreement, VTB Bank will be engaged as one of the leading institutions in financing Mechel’s current investment activities and in servicing the company’s financial operations. VTB Bank is also expected to act as a consultant to Mechel on projects related to the further development of Mechel’s international and domestic accounts and the implementation of modern financial resource management technologies designed to enhance Mechel’s performance.
 
Mechel, one of the leading Russian mining and metals companies, unites producers of coal, iron ore, nickel, steel, rolled products, and hardware. Its business includes three segments—mining, steel, and power—and its products are marketed domestically and internationally.