OREANDA-NEWS. Mechel OAO (NYSE: MTL), one of the leading Russian mining and metals companies, reports that its extraordinary general shareholders' meeting approved the pledge of a blocking minority stake of common shares in Mechel Mining OAO, which comprises the company's mining assets, in favor of Sberbank of Russia OAO.

On the basis of several agreements between Mechel and Sberbank signed in December 2013, a part of the Group's debt to the bank, totaling 25.5 billion rubles (773.9 million US dollars based on the Central Bank's exchange rate as of December 20, 2013), was refinanced. As a result of this refinancing, the tenor of short-term debt to the bank was extended by 5 years with a grace period until March 2015. This refinancing involves solely the Group's existing debt and will not increase Mechel OAO's overall credit portfolio.

One of the signed agreements' requisite conditions is the pledge of a blocking minority stake of Mechel Mining OAO's common shares, totaling 25% plus one share, in favor of the bank as additional security for credit obligations of the Group's enterprises to Sberbank of Russia OAO. According to the law of Russian Federation, a pledge of shares is an interested party transaction and as such is subject to approval by a general shareholders' meeting. An extraordinary general shareholders' meeting of Mechel OAO, held on March 5, 2014, decided to approve this transaction.