In February 2009 Gazprombank opened credit lines totaling $1billion for Mechel Mining’s subsidiaries (Mechel Mining is a part of Mechel Group). The credit facilities provided were used to finance the group’s current operations which allowed it to repay a part of its short-term debt.

Mechel Mining’s subsidiaries and Gazprombank signed amendment agreements to the credit facility agreements. According to the amendment agreements the credit maturity extends from three years to six years. Additionally, the parties have agreed to reduce both the interest rate and the security amount. Repayment of the credit body will start in three years and will be made by equal installments on a quarterly basis.

Mr. Stanislav Ploschenko, Mechel’s Chief Financial Officer, commented, “Gazprombank and Mechel have strong ties through a well-established long-standing partnership, and signing of this agreement adds more to our successful cooperation. This decision has allowed us to fully stabilize the company’s financial position in terms of debt repayment structure by creating a substantial safety cushion while the financial market is still volatile. It will help us focus further solely on our investment projects, which will considerably boost the profitability of our business and enhance the company’s investment attractiveness”.

Source: Mechel