Moscow, Russia – April 27, 2012 – Mechel OAO (NYSE: MTL), one of
the leading Russian mining and metals companies, announces completion of talks
with lenders resulting in waivers and amendments to certain major credit
facilities.
On March 29, 2012, Mechel entered talks with
over 25 leading international and Russian banks regarding some financial
covenants the company expected to breach due to uncertain market conditions and
a period of decline in market prices for its products.
These talks were successfully completed on April 26, 2012, as
lenders confirmed their agreement to waivers on a number of credit facilities
and including a significant structural change to financial covenants. These
changes to the financial parameters will increase the company’s financial and
operational flexibility, even in the event that price volatility on key markets
increases.
“Gaining approval from more than 25 leading international and
Russian banks within such a limited time frame is proof of their trust in
Mechel as a quality and reliable borrower as well as their confidence in our
company’s strategic choices. The new levels of covenants will enable us to
continue our operational and investment activity regardless of volatility on
the global financial and commodity markets. At the same time, one of our main
priorities is systematic deleveraging as a whole and reduction of short-term
debt in particular,” Mechel OAO’s Chief Financial Officer Stanislav Ploschenko
noted.
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.
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