* Write-offs deepen Mechel's 9-mo net loss to $2.2 bln
* Mechel's net debt was at $9.4 bln as of Dec. 6
* Says hopes to get $1 bln from 2014 assets sale
(Writes through to focus on debt)
By Polina Devitt and Svetlana Burmistrova
MOSCOW, Dec 23 Loss-making Russian coal miner
and steelmaker Mechel plans to raise around $1
billion from the sale of assets in 2014 which would help it to
offset $2 billion debt it has to repay next year, the company
said on Monday.
Mechel, controlled by billionaire Igor Zyuzin, like other
Russian steelmakers invested heavily in expansion before the
2008 financial crisis hit demand, forcing it to borrow to
Russia's largest lenders, including Sberbank and
VTB, have recently agreed to grant covenant holidays
for Mechel for the next year. Sberbank has also restructured
Mechel's $772 million loan.
The moves allowed the company to report financials for the
third and for the second quarter on Monday without the risk of
breaching debt covenants.
Its net debt was at $9.4 billion including financial leases
as of Dec. 6, of which $2 billion was due to be repaid in 2014,
the company's presentation showed. It had $0.4 billion in cash
and available credit lines at the same date.
"Next year the group will complete the restructuring of its
assets, selling off the remainder of the non-strategic assets,
which will bring around $1 billion of cash," chief financial
officer (CFO) Stanislav Ploschenko told a conference call.
The cash will be used to reduce the debt, he added. The
estimate includes proceeds from a planned sale of a minority
stake in its large Elga coal project in Russia.
Mechel has given up on plans to sell a stake in its Mechel
Mining and has postponed the buy-back of its own shares it
announced in June, Ploschenko added.
In previous years Mechel has spent several billion dollars
buying non-core assets, which it put up for disposal in 2012 and
for which it has yet to get significant proceeds.
The company has agreed to sell its ferroalloy assets to
Turkey's Yildirim Group for $425 million in August and hopes to
get the money in several weeks, it said on Monday.
Banks will have to discuss the company's debt restructuring
again in 2014, unless coal prices rise significantly, said
Sergey Donskoy, metals and mining analyst at Societe Generale.
Mechel's New York-listed shares were up 2.9 percent by 1619
GMT, while shares in Moscow closed up 1.9 percent, outperforming
its sector index.
The company plunged further into net loss in the first nine
months of 2013 hurt by one-off write-downs related to asset
sales and bad debt provisions, it said earlier on Monday.
Mechel reported a net loss of $2.2 billion for the first
nine months of 2013 compared to a $550 million net loss for the
same period a year ago.
The net loss was hit by write-offs of $1.1 billion as a
result of discontinued operations, $645 million of bad debt
provisions and foreign exchange losses of $151 million.
Adjusted for write-offs, the net loss was $483 million
compared to net income of $369 million a year earlier, said the
Revenue fell 19 percent year on year to $6.7 billion, while
adjusted earnings before interest, taxation, depreciation and
amortisation (EBITDA) of $608 million were down 55 percent.
(Reporting by Polina Devitt and Svetlana Burmistrova; editing
by Jason Neely and Keiron Henderson)