Mechel Obtains Credit Lines From VTB Bank
Mechel OAO, one of the leading Russian mining and metals companies, announces that VTB Bank has provided the Company with credit lines in the amount of 15 billion rubles (approximately US$560 million).
VTB Bank has opened one-year credit lines totaling 15 billion rubles for Yakutugol OJSHC, Southern Kuzbass Coal Company OAO and CMK OAO, subsidiaries of Mechel. The credit facilities will be used to fund the operations of these subsidiaries.
The establishment of the credit line is a continuation of the relationship between Mechel and VTB Bank, which supported Mechel’s acquisition of Yakutugol OJSHC and Elgaugol OAO stocks at auction in the autumn of 2007. That transaction was financed with Mechel’s own capital and capital provided mainly by VTB Bank.
The strong relationship between Mechel and VTB Bank is also substantiated by the Agreement on Long-term Mutually Beneficial Cooperation entered into by the companies in April 2008, with a view of implementing Mechel’s projects and development plans, as previously announced.
As part of the Agreement, VTB Bank will be engaged as one of the leading institutions in financing Mechel’s current investment activities and in servicing the Company’s financial operations. VTB Bank is also expected to act as a consultant to Mechel on projects related to the further development of Mechel’s international and domestic accounts and the implementation of modern financial resource management technologies designed to enhance Mechel’s performance.
Mechel is one of the leading Russian companies. Its business includes four segments: mining, steel, ferroalloy and power. Mechel unites producers of coal, iron ore concentrate, steel, rolled products, ferroalloys, hardware, heat and electric power. Mechel products are marketed domestically and internationally.
