Mechel unable to pay $300 million to Alfa Bank for Donetsk electric metal works

Last Friday Mechel of I. Zyuzin paid the last tranche of Alfa Bank credit of $150 million, several sources close to Mechel and Alfa Bank claim to Vedomosti. Mechel and Alfa Bank confirm the news.

Mechel faced the need to prematurely pay off the debt 1.5 months ago. On March 13th, Alfa Bank demanded at the meeting of  Mechel  and its creditors that the company should pay off the credit within one week. Mechel raised the money in Alfa Bank in August 2013 when it opened long-term revolving credit line; they reported nothing about its size then. The payment date was June or July. The representative of Alfa Bank explained then that Mechel violated covenants for the credit that became the basis for the demand to immediately return the money. Later the sources close to Mechel told that in the end of 2013 the company agreed about covenant holidays with all creditor banks with exception for Alfa Bank. If Mechel failed to pay to the creditor then it would happen cross-default on the other liabilities, the company announced in the accounting for 2012.