* Loan worth 40 bln roubles ($1.28 bln
* Mechel's total debt $9.1 bln
* Shares up 6.4 pct
MOSCOW, April 10 Heavily indebted Russian miner
Mechel said it had signed a 40 billion rouble ($1.28
billion) agreement with Russian bank VTB, refinancing
loans due for repayment this year and buying time to dispose of
The deal announced on Wednesday comes a week after the steel
and coking coal producer, which has total debt of $9.1 billion,
won a breathing space from lenders when it renegotiated the
terms of a $1 billion loan.
"Securing a new credit agreement with VTB Bank will enable
the company to refinance a large share of its loans which are
due to be repaid in 2013, which will significantly improve the
group's debt structure in the next 12 months," Chief Financial
Officer Stanislav Ploschenko said in a statement.
Mechel has had to cut investments and put non-core assets up
for sale to service the debt it amassed to fund its expansion
before the 2008 financial crisis sent steel and coal prices
China's Baoshan Iron and Steel (Baosteel) is in
talks with Mechel to buy a 25 percent stake in the company's
mining unit for up to $1.25 billion, Russian media reported
earlier on Wednesday.
Mechel Mining, which is developing the huge Elga coal
deposit with proven reserves of 2.3 billion tonnes, accounted
for over 80 percent of the Mechel's adjusted earnings before
interest, taxation, depreciation and amortisation (EBITDA) in
the third quarter of 2012.
A spokesman for Mechel said the company was in talks with a
number of potential investors over the sale of the stake, but
declined to comment on the report about talks with Baosteel,
China's biggest steelmaker by market value.
Russia's state anti-monopoly service FAS said it had not yet
received any applications regarding a Mechel Mining deal.
Shares in New York-listed Mechel, which have lost
over 90 percent in value since their peak in 2008, were trading
up 6.4 percent at 1437 GMT.
Mechel said the VTB loan had a 15-month grace period with
final repayment due in five years. The interest rate will depend
on the company's net debt to EBITDA ratio and is due to decrease
with the company's deleveraging.