MOSCOW, June 11 (RAPSI) - The Moscow Commercial Court has ordered Mechel, the Russian steel giant, and five of its subsidiaries, to pay Sberbank over $1.2 million, RAPSI reports from the courtroom on Thursday.

Sberbank has demanded to recover from Mechel its debt under a non-revolving credit line agreement dated October 9, 2012. The loan (1.5 billion rubles, or $27.4 mln) was issued to the coal company Yuzhny Kuzbass. The other defendants, including Mechel, Mechel Mining, Yakutugol, Bratsk Ferroalloy Plant and Mecheltrans, were the guarantors in the deal.

On the same day, the parties signed a novation agreement that says that if the RUR to USD exchange rate reaches 50 rubles to the dollar, the borrower will have to repay the loan in dollars but at the rate of 30 rubles/1 USD. In its lawsuit, the bank demanded payment of the interest debt for the period between September 29, 2014, and March 28, 2015, in the amount of $1.2 million and the penalty.

Yuzhny Kuzbass filed a counterclaim to annul the novation agreement because at the time of closing the bank allegedly abused its rights and burdened the borrower with risk without a reciprocal proposal. Also, the claimant states that the novation agreement undermines the national currency and is, in effect, a transfer by gift transaction, which is prohibited between legal entities.

On Wednesday, the Moscow Commercial Court fully granted Sberbank’s lawsuit and dismissed Yuzhny Kuzbass’ claim. The ruling is not effective yet and can be appealed within a month.

Mechel is heavily in debt, owing $2.3 billion to Gazprombank, $1.8 billion to VTB and $1.3 billion to Sberbank.

Industry Minister Denis Manturov said in March that Mechel cut its debt to $6.4 billion from $8.6 billion, according to RIA Novosti. About 40 percent of Mechel’s debt is in rubles.