Mechel
Encyclopedia
Mechel ( / , MTLPR) is one of Russia
’s leading mining
and metallurgical companies, producing coal
, iron ore, nickel steel
, rolled steel products, hardware, heat and electric power. Headquartered in Moscow
, the company operates facilities in Russia
, Romania
, Lithuania
, Kazakhstan
, Bulgaria
, and the United States
.
The company was incorporated on March 19, 2003. Its American Depositary Shares and ADS preferred stock
are traded on the New York Stock Exchange
. As of May 24, 2010, Mechel has a stable corporate family rating of "B1" as well as a "B1" probability of default rating, both assigned by Moody's
.
United States
Romania
Lithuania
Kazakhstan
Bulgaria
Transportation
Additionally, Mechel operates three port facilities:
criticized its CEO Igor Zyuzin
, and accused the company of selling resources to Russia at higher prices than those charged to foreign countries. The comments, which raised fears of another attack similar to that made on Yukos
in 2004, contrasted sharply with previous efforts by President Dmitry Medvedev
to improve Russia's reputation as an investor-friendly country.
On the following day, July 25, the company issued a contrite statement promising full cooperation with federal authorities, while share values rebounded by nearly 15 percent. Presidential aide Arkady Dvorkovich also sought to restore calm on July 28, declaring that all parties would "act in a civilized way," and confirming that Mechel was cooperating with antitrust authorities. Just hours later, however, Putin announced that Mechel had been avoiding taxes, by using foreign subsidiaries to sell its products internationally. His renewed attack caused share prices to tumble once more—this time by almost 33 percent.
An explosion at a Mechel coal mine on July 29 resulted in a further drop in share value of over 12 percent. Responding to investor concerns over the risk of political intervention, and to continuing apprehension that the company might face a fate similar to that of Yukos, First Deputy Prime Minister Igor Shuvalov
remarked that this was "a most unlikely scenario." He went on to suggest that "The most likely scenario is that the company will co-operate with the state authorities. We are intent on there not being any more stress."
Putin's attacks drew criticism from senior Russian leaders. Igor Yurgens, the head of Russia's Institute of Contemporary Development, said "It is not prudent to make your own stock market fall," adding that "There are 150 ways of deciding such problems without resorting to such comments." In an unprecedented move on July 31, President Medvedev called on authorities to stop intimidating business. "Our law enforcement agencies and government authorities should stop causing nightmares for business," he told a televised government meeting.
The reactions went some way to soothing fears of a possible attempt to seize control of the company, and helped to stabilize share prices—albeit at substantially lower levels than in previous months.
In the wake of these events, Mechel announced on August 8 that a preferred share issue, previously planned for placement on August 11, was to be postponed indefinitely.
, which caused a temporary foreign capital withdraw, as well as the Economic crisis of 2008, which caused decreased sales and more stringent loan requirements. Responding to these issues, Mechel took the opportunity to consolidate/reorganize operations and renegotiate the terms of its debt.
Though still expanding, albeit at a slower pace due to the recession, Mechel found it necessary to use this opportunity as a means to consolidate its position in the global market as well as reorganize its business model to meet the needs of customers and reflect the company's many locations.
As the financial crisis initially began having an effect on global businesses, the overwhelming majority of the company's debt was current/short-term. To enable the company to continue operations and resource development, Mechel had to find a way to restructure a larger portion of its debt to be payable in the long-term: this was done through several financing deals.
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
’s leading mining
Mining
Mining is the extraction of valuable minerals or other geological materials from the earth, from an ore body, vein or seam. The term also includes the removal of soil. Materials recovered by mining include base metals, precious metals, iron, uranium, coal, diamonds, limestone, oil shale, rock...
and metallurgical companies, producing coal
Coal
Coal is a combustible black or brownish-black sedimentary rock usually occurring in rock strata in layers or veins called coal beds or coal seams. The harder forms, such as anthracite coal, can be regarded as metamorphic rock because of later exposure to elevated temperature and pressure...
, iron ore, nickel steel
Steel
Steel is an alloy that consists mostly of iron and has a carbon content between 0.2% and 2.1% by weight, depending on the grade. Carbon is the most common alloying material for iron, but various other alloying elements are used, such as manganese, chromium, vanadium, and tungsten...
, rolled steel products, hardware, heat and electric power. Headquartered in Moscow
Moscow
Moscow is the capital, the most populous city, and the most populous federal subject of Russia. The city is a major political, economic, cultural, scientific, religious, financial, educational, and transportation centre of Russia and the continent...
, the company operates facilities in Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
, Romania
Romania
Romania is a country located at the crossroads of Central and Southeastern Europe, on the Lower Danube, within and outside the Carpathian arch, bordering on the Black Sea...
, Lithuania
Lithuania
Lithuania , officially the Republic of Lithuania is a country in Northern Europe, the biggest of the three Baltic states. It is situated along the southeastern shore of the Baltic Sea, whereby to the west lie Sweden and Denmark...
, Kazakhstan
Kazakhstan
Kazakhstan , officially the Republic of Kazakhstan, is a transcontinental country in Central Asia and Eastern Europe. Ranked as the ninth largest country in the world, it is also the world's largest landlocked country; its territory of is greater than Western Europe...
, Bulgaria
Bulgaria
Bulgaria , officially the Republic of Bulgaria , is a parliamentary democracy within a unitary constitutional republic in Southeast Europe. The country borders Romania to the north, Serbia and Macedonia to the west, Greece and Turkey to the south, as well as the Black Sea to the east...
, and the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
.
The company was incorporated on March 19, 2003. Its American Depositary Shares and ADS preferred stock
Preferred stock
Preferred stock, also called preferred shares, preference shares, or simply preferreds, is a special equity security that has properties of both an equity and a debt instrument and is generally considered a hybrid instrument...
are traded on the New York Stock Exchange
New York Stock Exchange
The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
. As of May 24, 2010, Mechel has a stable corporate family rating of "B1" as well as a "B1" probability of default rating, both assigned by Moody's
Moody's
Moody's Corporation is the holding company for Moody's Analytics and Moody's Investors Service, a credit rating agency which performs international financial research and analysis on commercial and government entities. The company also ranks the credit-worthiness of borrowers using a standardized...
.
Mining products
RussiaRussia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
- Southern Kuzbass Coal Company, MezhdurechenskMezhdurechenskMezhdurechensk may refer to:*Mezhdurechensk, Kemerovo Oblast, a city in Kemerovo Oblast, Russia*Mezhdurechensk, Komi Republic, an urban-type settlement in the Komi Republic, Russia...
, Kemerovo OblastKemerovo OblastKemerovo Oblast , also known as Kuzbass after the Kuznetsk Basin, is a federal subject of Russia , located in southwestern Siberia, where the West Siberian Plain meets the South Siberian mountains... - YakutugolYakutugolOJSC KhK Yakutugol is a Russian coal company located at Neryungri, Yakutia.Established in 2002 by the public offering of the State-owned SUE Yakutugol....
, NeryungriNeryungriNeryungri is the second largest town in the Sakha Republic, Russia. Population: Municipally, the town is incorporated as Neryungrinsky Municipal District ....
, Yakutia - Korshunov Mining Plant, Zheleznogorsk-IlimskyZheleznogorsk-IlimskyZheleznogorsk-Ilimsky is a town and the administrative center of Nizhneilimsky District of Irkutsk Oblast, Russia, located east of Bratsk and west of the northern tip of Lake Baikal, from the Ilim River and north of Irkutsk...
, Irkutsk OblastIrkutsk OblastIrkutsk Oblast is a federal subject of Russia , located in southeastern Siberia in the basins of Angara River, Lena, and Nizhnyaya Tunguska Rivers. The administrative center is the city of Irkutsk. Population: -History:... - Elga Coal Deposit, Yakutia
United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
- Mechel Bluestone, West VirginiaWest VirginiaWest Virginia is a state in the Appalachian and Southeastern regions of the United States, bordered by Virginia to the southeast, Kentucky to the southwest, Ohio to the northwest, Pennsylvania to the northeast and Maryland to the east...
Steel products
RussiaRussia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
- Chelyabinsk Metallurgical Plant, ChelyabinskChelyabinskChelyabinsk is a city and the administrative center of Chelyabinsk Oblast, Russia, located in the northwestern side of the oblast, south of Yekaterinburg, just to the east of the Ural Mountains, on the Miass River. Population: -History:...
, Chelyabinsk OblastChelyabinsk Oblast-External links:*... - Izhstal, IzhevskIzhevskIzhevsk is the capital city of the Udmurt Republic, Russia, situated on the Izh River in the Western Urals. Population: From 1984 to 1987 Izhevsk carried the name Ustinov |Minister of Defense of the USSR]], Marshal of the Soviet Union, Dmitry Ustinov). The city is an important industrial center,...
, Udmurt Republic - Beloretsk Metallurgical Plant, BeloretskBeloretskBeloretsk is a town in the Republic of Bashkortostan, Russia, situated on the Belaya River, from Ufa. The town serves as and the administrative center of Beloretsky District, although it is not administratively a part of it...
, Bashkortostan Republic - Urals Stampings Plant, ChebarkulChebarkulChebarkul is a town in Chelyabinsk Oblast, Russia, located on the shores of Chebarkul Lake west of Chelyabinsk. Population: Founded in 1736 as a fortress on the border between Russian and Bashkir lands, it later grew into a large Cossack stanitsa...
, Chelyabinsk OblastChelyabinsk Oblast-External links:*... - Moscow Coke and Gas Plant, Vidnoe, Moscow OblastMoscow OblastMoscow Oblast , or Podmoskovye , is a federal subject of Russia . Its area, at , is relatively small compared to other federal subjects, but it is one of the most densely populated regions in the country and, with the 2010 population of 7,092,941, is the second most populous federal subject...
- Vyartsilya Metal Products Plant, VyartsilyaVyartsilyaVyartsilya is an urban locality in the Republic of Karelia, Russia, located near the border with Finland, west of Petrozavodsk. Population: Before World War II, Vyartsilya belonged to Finland and was named Värtsilä....
, Republic of KareliaRepublic of KareliaThe Republic of Karelia is a federal subject of Russia .-Geography:The republic is located in the northwestern part of Russia, taking intervening position between the basins of White and Baltic seas... - Kaslinsky Plant of Art Casting, KasliKasliKasli is a town in Chelyabinsk Oblast, Russia, located northwest of Chelyabinsk. Population: It was founded in 1747 as the settlement of Kaslinsky around a foundry...
, Chelyabinsk OblastChelyabinsk Oblast-External links:*...
Romania
Romania
Romania is a country located at the crossroads of Central and Southeastern Europe, on the Lower Danube, within and outside the Carpathian arch, bordering on the Black Sea...
- Mechel Câmpia Turzii, Câmpia TurziiCâmpia TurziiCâmpia Turzii is a city in Cluj County, Romania, which was formed in 1925 by the union of two villages, Ghiriş and Sâncrai...
- Mechel Târgovişte, TârgovişteTârgovisteTârgoviște is a city in the Dâmbovița county of Romania. It is situated on the right bank of the Ialomiţa River. , it had an estimated population of 89,000. One village, Priseaca, is administered by the city.-Name:...
- Oţelu Roşu Plant, Oţelu RoşuOtelu RosuOţelu Roşu is a town in southwestern Caraş-Severin County, Romania, in the Bistra Valley. It is situated on the national road 68, between Caransebeş and Haţeg...
- Ductil Steel Buzău, BuzăuBuzauThe city of Buzău is the county seat of Buzău County, Romania, in the historical region of Wallachia. It lies near the right bank of the Buzău River, between the south-eastern curvature of the Carpathian Mountains and the lowlands of Bărăgan Plain.The city's name dates back to 376 AD when the name...
Lithuania
Lithuania
Lithuania , officially the Republic of Lithuania is a country in Northern Europe, the biggest of the three Baltic states. It is situated along the southeastern shore of the Baltic Sea, whereby to the west lie Sweden and Denmark...
- Mechel Nemunas, KaunasKaunasKaunas is the second-largest city in Lithuania and has historically been a leading centre of Lithuanian economic, academic, and cultural life. Kaunas was the biggest city and the center of a powiat in Trakai Voivodeship of the Grand Duchy of Lithuania since 1413. During Russian Empire occupation...
Ferroalloys products
RussiaRussia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
- Southern Urals Nickel Plant, OrskOrskOrsk is the second largest city in Orenburg Oblast, Russia, located on the steppe about southeast of the southern tip of the Ural Mountains. The city straddles the Ural River. Since this river is considered a boundary between Europe and Asia, Orsk can be said to lie in two continents. It is...
, Orenburg OblastOrenburg OblastOrenburg Oblast is a federal subject of Russia . Its administrative center is the city of Orenburg. From 1938 to 1957, it bore the name Chkalov Oblast in honor of Valery Chkalov... - Bratsk Ferroalloy Plant, BratskBratskBratsk is a city in Irkutsk Oblast, Russia, located on the Angara River near the vast Bratsk Reservoir. Population: Although the name sounds like the Russian word for 'brother' , it actually comes from 'bratskiye lyudi', an old name for the Buryats.-History:The first Europeans in the area arrived...
, Irkutsk OblastIrkutsk OblastIrkutsk Oblast is a federal subject of Russia , located in southeastern Siberia in the basins of Angara River, Lena, and Nizhnyaya Tunguska Rivers. The administrative center is the city of Irkutsk. Population: -History:... - Tikhvin Smelting Plant, TikhvinTikhvinTikhvin is a town and the administrative center of Tikhvinsky District of Leningrad Oblast, Russia, located on both banks of the Tikhvinka River in the east of the oblast, east of St. Petersburg. Tikhvin is also an industrial and cultural center of the district, as well as its transportation...
, Leningrad OblastLeningrad OblastLeningrad Oblast is a federal subject of Russia . It was established on August 1, 1927, although it was not until 1946 that the oblast's borders had been mostly settled in their present position...
Kazakhstan
Kazakhstan
Kazakhstan , officially the Republic of Kazakhstan, is a transcontinental country in Central Asia and Eastern Europe. Ranked as the ninth largest country in the world, it is also the world's largest landlocked country; its territory of is greater than Western Europe...
- Voskhod Mining Plant, Aktobe Province
Power
RussiaRussia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
- Kuzbass Power Sales Company, Kemerovo OblastKemerovo OblastKemerovo Oblast , also known as Kuzbass after the Kuznetsk Basin, is a federal subject of Russia , located in southwestern Siberia, where the West Siberian Plain meets the South Siberian mountains...
- Southern Kuzbass GRESSouthern Kuzbass GRESOJSC Southern Kuzbass GRES is a thermal power plant in Kaltan, Kemerovo Oblast, Russia.As of January 1, 2007 total electric power 554 MW, heating — 560 Gcal/h.Currently is a part of Mechel....
, KaltanKaltanKaltan is a town in Kemerovo Oblast, Russia, located on the Kondoma River, south of Kemerovo. Population: It was founded in 1946 and was granted urban-type settlement status in 1950 and town status in 1959....
, Kemerovo OblastKemerovo OblastKemerovo Oblast , also known as Kuzbass after the Kuznetsk Basin, is a federal subject of Russia , located in southwestern Siberia, where the West Siberian Plain meets the South Siberian mountains...
Bulgaria
Bulgaria
Bulgaria , officially the Republic of Bulgaria , is a parliamentary democracy within a unitary constitutional republic in Southeast Europe. The country borders Romania to the north, Serbia and Macedonia to the west, Greece and Turkey to the south, as well as the Black Sea to the east...
- Toplofikatsia Ruse, Ruse, Bulgaria
Various
Sales- Mechel Trading AG
- Mechel Service Global
- Mechel Service
- HBL Holding
- Mechel Trading House
Transportation
- Mecheltrans
Additionally, Mechel operates three port facilities:
- Trade Port Posiet, Primorskiy Krai
- Port of KambarkaKambarkaKambarka is a town and the administrative center of Kambarsky District of the Udmurt Republic, Russia, located on the Kambarka River , southeast of Izhevsk. Population:...
(Kama settlement, Udmurt Republic) - Port Mechel-TemryukTemryukTemryuk is the largest town and the administrative center of Temryuksky District of Krasnodar Krai, Russia, located on the Taman peninsula on the right bank of the Kuban River not far from its entry into the Temryuk Bay, amid a field of mud volcanoes. The seaport of Temryuk is situated from the...
, Krasnodar KraiKrasnodar Krai-External links:* **...
2008 controversy
Mechel's stock plunged by almost 38 percent on July 24, 2008 after Russia's Prime Minister Vladimir PutinVladimir Putin
Vladimir Vladimirovich Putin served as the second President of the Russian Federation and is the current Prime Minister of Russia, as well as chairman of United Russia and Chairman of the Council of Ministers of the Union of Russia and Belarus. He became acting President on 31 December 1999, when...
criticized its CEO Igor Zyuzin
Igor Zyuzin
Zyuzin, Igor Vladimirovich is a major Russian businessman, Managing Director and a major shareholder of mining and metallurgical holding company "Mechel". According to Forbes magazine on March 8, 2008 his personal fortune estimated at $ 13.1 billion. According to Forbes magazine on March 11, 2009...
, and accused the company of selling resources to Russia at higher prices than those charged to foreign countries. The comments, which raised fears of another attack similar to that made on Yukos
YUKOS
OJSC "Yukos Oil Company" was a petroleum company in Russia which, until 2003, was controlled by Russian oligarch Mikhail Khodorkovsky and a number of other prominent Russian businessmen. After Yukos was bankrupted, Khodorkovsky was convicted and sent to prison.Yukos headquarters was located in...
in 2004, contrasted sharply with previous efforts by President Dmitry Medvedev
Dmitry Medvedev
Dmitry Anatolyevich Medvedev is the third President of the Russian Federation.Born to a family of academics, Medvedev graduated from the Law Department of Leningrad State University in 1987. He defended his dissertation in 1990 and worked as a docent at his alma mater, now renamed to Saint...
to improve Russia's reputation as an investor-friendly country.
On the following day, July 25, the company issued a contrite statement promising full cooperation with federal authorities, while share values rebounded by nearly 15 percent. Presidential aide Arkady Dvorkovich also sought to restore calm on July 28, declaring that all parties would "act in a civilized way," and confirming that Mechel was cooperating with antitrust authorities. Just hours later, however, Putin announced that Mechel had been avoiding taxes, by using foreign subsidiaries to sell its products internationally. His renewed attack caused share prices to tumble once more—this time by almost 33 percent.
An explosion at a Mechel coal mine on July 29 resulted in a further drop in share value of over 12 percent. Responding to investor concerns over the risk of political intervention, and to continuing apprehension that the company might face a fate similar to that of Yukos, First Deputy Prime Minister Igor Shuvalov
Igor Shuvalov
Igor Ivanovich Shuvalov is a Russian lawyer and politician. He currently serves as First Deputy Prime Minister in Vladimir Putin's Second Cabinet. According to the order of Prime Minister Vladimir Putin, he is to perform the duty of Prime Minister when Putin is out of office...
remarked that this was "a most unlikely scenario." He went on to suggest that "The most likely scenario is that the company will co-operate with the state authorities. We are intent on there not being any more stress."
Putin's attacks drew criticism from senior Russian leaders. Igor Yurgens, the head of Russia's Institute of Contemporary Development, said "It is not prudent to make your own stock market fall," adding that "There are 150 ways of deciding such problems without resorting to such comments." In an unprecedented move on July 31, President Medvedev called on authorities to stop intimidating business. "Our law enforcement agencies and government authorities should stop causing nightmares for business," he told a televised government meeting.
The reactions went some way to soothing fears of a possible attempt to seize control of the company, and helped to stabilize share prices—albeit at substantially lower levels than in previous months.
In the wake of these events, Mechel announced on August 8 that a preferred share issue, previously planned for placement on August 11, was to be postponed indefinitely.
Late 2008 through 2009: recession, reorganization, and consolidation
Following the tax and pricing controversy, Mechel was further harmed by fallout from the 2008 South Ossetia War2008 South Ossetia war
The 2008 South Ossetia War or Russo-Georgian War was an armed conflict in August 2008 between Georgia on one side, and Russia and separatist governments of South Ossetia and Abkhazia on the other....
, which caused a temporary foreign capital withdraw, as well as the Economic crisis of 2008, which caused decreased sales and more stringent loan requirements. Responding to these issues, Mechel took the opportunity to consolidate/reorganize operations and renegotiate the terms of its debt.
Though still expanding, albeit at a slower pace due to the recession, Mechel found it necessary to use this opportunity as a means to consolidate its position in the global market as well as reorganize its business model to meet the needs of customers and reflect the company's many locations.
- October 22, 2008: Mechel organizes its Romanian companies into the East-European Steel Division, based at the Targoviste plant.
- October 30, 2008: Including the recently acquired ferroalloy assets of Oriel Resources with its current ferroalloy assets, Mechel expands and consolidates its ferroalloy business.
- January 13, 2009: GazprombankGazprombankGazprombank is the largest Russian non-state owned bank, which is among the three largest banks in Russia. It is a joint stock bank founded in 1990. The bank is owned by the Russian gas company Gazprom, which controls 62.59% of shares directly and also retains shares through its subsidiaries...
arranges financing in the amount of up to $255 million for a universal rail and structural steel mill at Mechel's Chelyabinsk Metallurgical Plant. Designed to meet the needs of the Russian RailwaysRussian RailwaysThe Russian Railways , is the government owned national rail carrier of the Russian Federation, headquartered in Moscow. The Russian Railways operate over of common carrier routes as well as a few hundred kilometers of industrial routes, making it the second largest network in the world exceeded...
contract that was signed in November, 2008, the $500 million+ mill (total cost) will produce over 1 million tons of rail and structural shapes annually. The mill is expected to be commissioned at the end of 2010. - April 22-May 8, 2009: Mechel signs and closes an agreement to acquire Bluestone Coal and select affiliates of West Virginia for a price of $436 million and 83.3 million preferred shares, as well as assuming Bluestone's $136 million net debt. Bluestone Coal, which was a privately-held business engaging in the mining, processing, and sale of hard coking coal, sold 2.8 million tons of hard coking coal, generated $327 million in sales, and had an EBITDA of roughly $94 million in 2008.
As the financial crisis initially began having an effect on global businesses, the overwhelming majority of the company's debt was current/short-term. To enable the company to continue operations and resource development, Mechel had to find a way to restructure a larger portion of its debt to be payable in the long-term: this was done through several financing deals.
- December 4, 2008: VTB Bank provides a 15 billion ruble (approximately $560 million) credit line to be used for the operations of Yakutugol, Southern Kuzbass Coal Company, and Chelyabinsk Metallurgical Plant, which are all subsidiaries of Mechel. Along with the credit line, VTB Bank agrees to become a primary financier of Mechel's current investment activities as well as servicer of financial operations. Additionally, Mechel (per the agreement) is expected to consult VTB Bank regarding development of accounts (foreign and domestic) and the implementation of modern financial management technologies.
- February 9, 2009: Gazprombank extends $1 billion in credit to Mechel subsidiary companies. The credit has a term of 3 years and will mainly be for the purpose of repaying short-term debtMoney marketThe money market is a component of the financial markets for assets involved in short-term borrowing and lending with original maturities of one year or shorter time frames. Trading in the money markets involves Treasury bills, commercial paper, bankers' acceptances, certificates of deposit,...
. - July 13–20, 2009: Mechel successfully refinances $2.6 billion in short-term credit that was used to acquire Yakutugol, Elgaugol, and Oriel Resources. Per the agreement, Mechel refinanced $1.6 billion of the $2 billion Yakutugol/Elgaugol acquisition credit, directly repaying the outstanding $400 million with company funds, and $1 billion of the $1.5 billion Oriel Resources acquisition credit, repaying the outstanding $500 million from the February, 2009 Gazprombank credit. Both agreements are set to fully mature in December, 2012; they are set at a rate of LIBOR rate +6% and LIBOR rate +7%, respectively.
- December 2, 2009: VTB Bank and Mechel agree to prolong the previous year's 15 billion ruble (approximately $560 million) credit/loan for another 3 years. the prolongation agreement calls for interest payment during the initial 2.5 years, followed by repayment of the principal. According to the corresponding press release, "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."