(EnergyAsia, November 6 2012, Tuesday) — Mechel OAO, one of Russia’s leading mining and metals companies, said it has secured long-term agreements with Russia’s Sberbank to open four credit lines for a total of 24 billion rubles for one of its key subsidiaries. (US$1=32 ruble).
The credit lines for Southern Kuzbass Coal Company OAO are for a period of five years with a three-year grace period.
Two of the credit lines will be available in the form of a bi-currency agreement with a built-in derivative instrument to keep down the interest rate on the loan.
Mechel said Yakutugol Holding Company OAO, Mechel Mining OAO and Mechel OAO have agreed to act as guarantors of the facility.
Mechel’s chief financial officer, Stanislav Ploschenko, said:
“We greatly value our ties with Russia’s largest state bank, our longstanding and reliable partner, and are glad that we managed to reach a mutually profitable agreement on attractive terms despite the current volatility of global financial markets.
“The loaned funds will be used exclusively for refinancing the group’s short-term debt, thus becoming an important step in implementing our strategy of extending the maturity of our debt portfolio.
“We also consider the loan granted at a relatively difficult time for the mining industry as additional proof of our partner’s trust in Mechel.”