The talks were in regard to financial contracts the company expected to break due to uncertain market conditions and a continued drop in market prices for its products.
The talks began on March 29 and wrapped up on April 26, with lenders agreeing to waivers on multiple credit facilities and significant structural changes to financial contracts.
The changes will allow for an increase in Mechel OAO’s financial and operational flexibility despite the level of market uncertainty and the potential increase in price volatility on key markets.
“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,” Mechel OAO’s Chief Financial Officer Stanislav Ploschenko said. “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 is one of the leading Russian companies, with four business segments that include mining, steel, ferroalloy and power. Mechel unites producers of coal, iron ore concentrate, nickel, steel, ferrochrome, ferrosilicon, rolled products, hardware, heat and electric power. Its products are marketed domestically and internationally.