OAO Mechel (MTLR), billionaire Igor Zyuzin’s coal and steel producer, said it won’t seek to raise capital to service debt this year as it expects to sign an agreement next week to restructure $2.7 billion of borrowings.
Mechel plans to complete the accord with lenders including Royal Bank of Scotland Group Plc and Bank UralSib to extend debt repayments to December 2012, Chief Financial Officer Stanislav Ploschenko said on a conference call with investors today.
The Moscow-based company will borrow for investment and is in talks with Russian banks on the sale of 45 billion rubles ($1.38 billion) of infrastructure bonds to pay for a railroad to the Elga coal field in eastern Siberia, Ploschenko said.
A proposed sale of 30 billion rubles of commercial paper with a maturity of one to three years will remain a “measure of last resort,” Ploschenko said, adding that the company plans to invest 29 billion rubles in 2009.
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