Mechel receives lenders’ approval on waivers and amendments to credit facilities

Mechel, 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.