OREANDA-NEWS. December 04, 2009. Mechel OAO (NYSE: MTL), one of the leading Russian mining and metals companies, announced agreement with VTB Bank about 3 year prolongation of the 15 billion rubles loan given to Mechel in 2008, reported the press-centre of Mechel.

At the end of 2008 VTB Bank opened credit lines totaling 15 billion rubles to Mechel’s subsidiaries Yakutugol OJSHC, Southern Kuzbass OAO and Chelyabinsk Metallurgical Plant OAO. Initially, credit period was one year. The credit facilities were used to fund the operations of these Mechel’s subsidiaries.

Prolongation agreement provides for interest payment during the first 2.5 years only with further monthly repayment of the principal debt. This agreement is based on strong and long-term relations between Mechel and VTB Bank and mutual interest of the parties in future complex cooperation development.

This prolongation is a one more step within a framework of the Agreement on Long-term Mutually Beneficial Cooperation entered into by the companies in April 2008, with a view of implementing Mechel's projects and development plans.

Stanislav Ploschenko, Mechel’s CFO, commented on the event:
“Having completed restructuring of the syndicated loans in summer this year, we keep on working to optimize our credit portfolio, and focusing on the use of long-term financial tools. In this regard we highly appreciate our partnership with VTB Bank. We cooperate not only in the sphere of commercial crediting but in the investment banking area as well. This was confirmed by VTB Bank’s participation in placing of one of our bonds’ tranche in October this year. Being a one more logical step in cooperation of our companies, this prolongation agreement will allow Mechel to bring a significant share of its short-term loans into the long-term with amortized repayment schedule from funds sourced from operational activities of Mechel’s plants.”