MOSCOW, July 23 (Reuters) - Restructuring the debt of struggling Russian miner Mechel through state development bank VEB is preferable to allowing the company to go bust, President Vladimir Putin’s top economic aide said on Wednesday.
Hit by weak prices for its products, Mechel is in critical need of financial support. It has already undergone several debt restructurings but the head of VEB said this month he recommended avoiding further bailout schemes as they would be loss-making.
“Restructuring would be less painful than bankruptcy in terms of the interests of the country and the company itself,” the economic aide, Andrei Belousov, told journalists, warning of the risks to creditor banks if the company were to go bust.
The Russian government will come up with a plan to save Mechel within a week, he said.
Reporting by Darya Korsunskaya; Writing by Alessandra Prentice, Editing by Timothy Herttage