Mechel Announces Mechel Trading AG Obtaining Loan for Re-financing Group’s Current Debt
Moscow, Russia — October 24, 2011 – Mechel OAO (NYSE: MTL), one of the leading Russian mining and metals companies, announces that ING Bank N.V., UniCredit Bank AG, Barclays Capital Inc. and ZAO UnicreditBank have provided a syndicated loan to Mechel Trading AG.
The banks have granted a credit facility totaling 180 million US dollars. The facility may be increased to 350 million US dollars by other banks as well. It carries a three-year tenor with an 18-month grace period. The facility will be used to re-finance a portion of Mechel Group’s short-term loans.
Mechel OAO and Chelyabinsk Metallurgical Plant OAO act as guarantors of the facility. The credit is also supported by an assignment of Mechel Trading AG’s offtake contracts.
“Receiving a long-term loan on competitive terms given the state of global financial markets demonstrates the trust the international banking community puts in us as a high-quality borrower. It also demonstrates our ability to make good deals in any market conditions. We value very highly our partnership with the lending banks in this deal, and we believe that it is cooperation in a difficult market situation that lays the most solid platform for long-term relationships.
“The growth of Mechel Group’s exports of steel products as well as distribution of third-party products requires long-term financial resources for the Group’s trading business. The new facility covers our financial requirements and replaces our current short-term credit lines, while improving the maturity profile of our debt portfolio and reducing the cost of financing,” Mechel OAO’s Chief Financial Officer Stanislav Ploschenko said.
Mechel is one of the leading Russian companies. Its business includes four segments: mining, steel, ferroalloy and power. Mechel unites producers of coal, iron ore concentrate, nickel, ferrochrome, ferrosilicon, steel, rolled products, hardware, heat and electric power. Mechel products are marketed domestically and internationally.