Mechel announces obtaining 500M Dollar credit

Mechel, one of the leading Russian mining and metals companies, announces the signing of long-term loan facilities with Gazprombank on providing credit lines to Yakutugol Holding Company OAO and Southern Kuzbass Coal Company OAO in the aggregate amount of 500 million US dollars.

Gazprombank provided Mechel Mining OAO’s enterprises with credit lines totaling 500 million US dollars. The new loan facilities include a five-year tenor with a three-year grace period.

“The signing of these credit agreements is another successful milestone of our strategic partnership with Gazprombank and vivid proof of a major bank’s trust in our company. The loans will be used to finance operational activities, which will enable us to use our operating cash flow to re-finance a significant part of the Group’s short-term debt and thus dramatically improve the structure of our credit portfolio. This is in line with our policy of lengthening the duration of our debt instruments and gradual deleveraging,” Mechel OAO’s Chief Financial Officer Stanislav Ploschenko said.