Russian government to discuss Mechel debts
MOSCOW, November 10 (RAPSI) – Head of VTB Bank Andrey Kostin confirmed on Monday that the Russian government will discuss the matter of restructuring debt of Mechel, Russia's biggest producer of steelmaking coal, RIA Novosti reports.
According to Kommersant daily, the government’s agenda includes two primary options. One, spearheaded by the banks, is to convert the $3 billion debt into 75% of capital through additional stock emissions. The other suggests debt restructuration through a contract with the creditors, who will take over the company.
Mechel announced on May 13 that its coal production in the first quarter decreased 13% year on year, to 5.565 million metric tons, and that its steel output fell 21% to 1.03 million metric tons. As for February 2014, Mechel’s net debt amounted to over $8 billion. Its net loss for the first nine months of 2013, calculated under US GAAP, reached $2.2 billion.
In early October, Mechel ceased paying off its debts, after which VTB and Sberbank turned to court.