MOSCOW, August 4 (RAPSI) – The Moscow Commercial Court has upheld a lawsuit by Rosbank, part of France’s Societe Generale, against Metallurg-Trust, affiliated with Mechel Group. Under the ruling, Metallurg Trust is to pay 969.7 million rubles ($27 million) to Rosbank.
The court ruled Metallurg-Trust to pay its primary debt, 892.5 million rubles, plus interest. It was noted at the hearing that the lawsuit hinged on the June 25, 2010 cession agreement, under which the defendant is required to repay its debt in full.
The bank’s representative noted at the hearing that, until December 2013, the company had paid its obligations and liabilities under the agreement, including its debt under an installment plan, and that it was to have started repaying the main debt from 2014. After the company stopped fulfilling its contractual obligations in 2014, the bank demanded that the entire sum be repaid immediately.
On Monday, the court ruled against a Metallurg-Trust counterclaim on annulling the cession agreement. The defense demanded that the counterclaim should not be upheld because the rights assigned to the bank under the agreement could not be exacted.
The court is considering several lawsuits on recovering debt from Metallurg-Trust.
In June, the court ruled in favor of Markrose Ltd, which sued Metallurg-Trust for over $40.2 million. The initial lawsuit was filed by Russia’s MDM Bank, which later assigned its liability to a Cyprus-registered company.
The court has also accepted a VTB24 lawsuit to collect 1.969 billion rubles ($55 million) from Metallurg Trust. The claim will be considered on August 27.
According to Mechel’s financial statements, it launched transactions with Metallurg-Trust in 2010, eventually gaining influence over the trading company “within the framework of their business relations.”
Mechel, one of the largest Russian mining and metals groups, 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 $9 billion. Its net loss for the first nine months of 2013, calculated under US GAAP, reached $2.2 billion.