OREANDA-NEWS. September 23, 2010. Mechel OJSC (NYSE: MTL), one of the leading Russian mining and metals companies, announces it has signed a loan agreement to finance a universal rolling mill installation project at its Chelyabinsk Metallurgical Plant OJSC (CMP OJSC) subsidiary, reported the press-centre of Mechel.

The new USD 471.2 million* Senior Term Loan facility, entirely fronted by BNP Paribas S.A., consists of three tranches underwritten by BNP Paribas S.A., GPB (OJSC) and UniCredit Corporate Banking S.p.A. GPB (OJSC)’s tranche is USD 219.4 million, BNP Paribas S.A.’s tranche is EUR102.8 million, UniCredit Corporate Banking S.p.A.’s tranche is EUR 89.2 million. The disbursement period under all three tranches is 30 months starting from the date of signing of the credit facility agreement. The repayment will be done by equal semi-annual installments starting at the end of the disbursement period spreading over 6 years for the first tranche and 7.5 years for the second and the third tranches. The credit facility benefits from insurance coverage of the Italian, German and Chinese export credit agencies – respectively Sace, Euler Hermes and Sinosure.

The purpose of the facility is to finance payments under two contracts: the equipment and technology supply contract signed with Danieli & C. Officine Meccaniche S.p.A. and the general construction contract with MinMetals Engineering Co., Ltd.

Stanislav Ploshchenko, Mechel’s Chief Financial Officer commented: “Only a week after the successful refinancing of the 2 billion dollars of foreign debt we signed another landmark loan agreement, which secures financing for our biggest investment project in the steel division, ensuring its timely execution. This agreement is unique not only in its long tenor but also in the number and quality of its participants representing both foreign and Russian banks as well as 3 national export credit agencies. This marks the level of confidence in our Group and the investment projects we are carrying out. The universal rolling mill is a strategic project for our Group and for the infrastructure development in Russia. When it is installed it will primarily manufacture high quality railroad rails up to 100 meters in length using state-of-the-art rolling technology. This product along with high quality structural shapes will dramatically improve the efficiency at CMP and of the entire steel division of our Group.”

* A part of credit facilities is arranged in Euro. The total sum in US dollars is calculated in accordance with the cross-rate of CB RF as of September 20, 2010 (1= USD 1.311).